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Sub. H. B. No. 510 As Pending in the House Ways and Means Committee(L# 2448-1)

(1) "Income tax revenue" means the total amount withheld
under section 5747.06 of the Revised Code by the taxpayer during
the taxable year, or during the calendar year that includes the
tax period, from the compensation of each employee employed in the
project to the extent the employee's withholdings are not used to
determine the credit under section 122.171 of the Revised Code.
"Income tax revenue" excludes amounts withheld before the day the
taxpayer becomes eligible for the credit.

(2) "Baseline income tax revenue" means income tax revenue
except that the applicable withholding period is the twelve months
immediately preceding the date the tax credit authority approves
the taxpayer's application multiplied by the sum of one plus an
annual pay increase factor to be determined by the tax credit
authority. If the taxpayer becomes eligible for the credit after
the first day of the taxpayer's taxable year or after the first
day of the calendar year that includes the tax period, the
taxpayer's baseline income tax revenue for the first such taxable
or calendar year of credit eligibility shall be reduced in
proportion to the number of days during the taxable or calendar
year for which the taxpayer was not eligible for the credit. For
subsequent taxable or calendar years, "baseline income tax
revenue" equals the unreduced baseline income tax revenue for the
preceding taxable or calendar year multiplied by the sum of one
plus the pay increase factor.

(B) The tax credit authority may make grants under this
section to foster job creation in this state. Such a grant shall
take the form of a refundable credit allowed against the tax
imposed by section 5725.18, 5726.02, 5729.03, 5733.06, or 5747.02
or levied under Chapter 5751. of the Revised Code. The credit
shall be claimed for the taxable years or tax periods specified in
the taxpayer's agreement with the tax credit authority under
division (D) of this section. With respect to taxes imposed under
section
5726.02, 5733.06, or 5747.02 or Chapter 5751. of the
Revised Code, the credit shall be claimed in the order required
under section
5726.98, 5733.98, 5747.98, or 5751.98 of the
Revised Code. The amount of the credit available for a taxable
year or for a calendar year that includes a tax period equals the
excess income tax revenue for that year multiplied by the
percentage specified in the agreement with the tax credit
authority. Any credit granted under this section against the tax
imposed by section 5733.06 or 5747.02 of the Revised Code, to the
extent not fully utilized against such tax for taxable years
ending prior to 2008, shall automatically be converted without any
action taken by the tax credit authority to a credit against the
tax levied under Chapter 5751. of the Revised Code for tax periods
beginning on or after July 1, 2008, provided that the person to
whom the credit was granted is subject to such tax. The converted
credit shall apply to those calendar years in which the remaining
taxable years specified in the agreement end.

(C) A taxpayer or potential taxpayer who proposes a project
to create new jobs in this state may apply to the tax credit
authority to enter into an agreement for a tax credit under this
section. The director of development
services shall prescribe the
form of the application. After receipt of an application, the
authority may enter into an agreement with the taxpayer for a
credit under this section if it determines all of the following:

(1) The taxpayer's project will increase payroll and income
tax revenue;

(2) The taxpayer's project is economically sound and will
benefit the people of this state by increasing opportunities for
employment and strengthening the economy of this state;

(3) Receiving the tax credit is a major factor in the
taxpayer's decision to go forward with the project.

(D) An agreement under this section shall include all of the
following:

(1) A detailed description of the project that is the subject
of the agreement;

(2) The term of the tax credit, which shall not exceed
fifteen years, and the first taxable year, or first calendar year
that includes a tax period, for which the credit may be claimed;

(3) A requirement that the taxpayer shall maintain operations
at the project location for at least the greater of seven years or
the term of the credit plus three years;

(4) The percentage, as determined by the tax credit
authority, of excess income tax revenue that will be allowed as
the amount of the credit for each taxable year or for each
calendar year that includes a tax period;

(5) The pay increase factor to be applied to the taxpayer's
baseline income tax revenue;

(6) A requirement that the taxpayer annually shall report to
the director of development services employment, tax withholding,
investment, and other information the director needs to perform
the director's duties under this section;

(7) A requirement that the director of development
services
annually review the information reported under division (D)(6) of
this section and verify compliance with the agreement; if the
taxpayer is in compliance, a requirement that the director issue a
certificate to the taxpayer stating that the information has been
verified and identifying the amount of the credit that may be
claimed for the taxable or calendar year;

(8) A provision providing that the taxpayer may not relocate
a substantial number of employment positions from elsewhere in
this state to the project location unless the director of
development
services determines that the legislative authority of
the county, township, or municipal corporation from which the
employment positions would be relocated has been notified by the
taxpayer of the relocation.

For purposes of this section, the movement of an employment
position from one political subdivision to another political
subdivision shall be considered a relocation of an employment
position unless the employment position in the first political
subdivision is replaced.

(E) If a taxpayer fails to meet or comply with any condition
or requirement set forth in a tax credit agreement, the tax credit
authority may amend the agreement to reduce the percentage or term
of the tax credit. The reduction of the percentage or term may
take effect in the current taxable or calendar year.

(F) Projects that consist solely of point-of-final-purchase
retail facilities are not eligible for a tax credit under this
section. If a project consists of both point-of-final-purchase
retail facilities and nonretail facilities, only the portion of
the project consisting of the nonretail facilities is eligible for
a tax credit and only the excess income tax revenue from the
nonretail facilities shall be considered when computing the amount
of the tax credit. If a warehouse facility is part of a
point-of-final-purchase retail facility and supplies only that
facility, the warehouse facility is not eligible for a tax credit.
Catalog distribution centers are not considered
point-of-final-purchase retail facilities for the purposes of this
division, and are eligible for tax credits under this section.

(G) Financial statements and other information submitted to
the department of development services or the tax credit authority
by an applicant or recipient of a tax credit under this section,
and any information taken for any purpose from such statements or
information, are not public records subject to section 149.43 of
the Revised Code. However, the chairperson of the authority may
make use of the statements and other information for purposes of
issuing public reports or in connection with court proceedings
concerning tax credit agreements under this section. Upon the
request of the tax commissioner or, if the applicant or recipient
is an insurance company, upon the request of the superintendent of
insurance, the chairperson of the authority shall provide to the
commissioner or superintendent any statement or information
submitted by an applicant or recipient of a tax credit in
connection with the credit. The commissioner or superintendent
shall preserve the confidentiality of the statement or
information.

(H) A taxpayer claiming a credit under this section shall
submit to the tax commissioner or, if the taxpayer is an insurance
company, to the superintendent of insurance, a copy of the
director of
development'sdevelopment services' certificate of
verification under division (D)(7) of this section with the
taxpayer's tax report or return for the taxable year or for the
calendar year that includes the tax period. Failure to submit a
copy of the certificate with the report or return does not
invalidate a claim for a credit if the taxpayer submits a copy of
the certificate to the commissioner or superintendent within sixty
days after the commissioner or superintendent requests it.

(I) The director of development services, after consultation
with the tax commissioner and the superintendent of insurance and
in accordance with Chapter 119. of the Revised Code, shall adopt
rules necessary to implement this section. The rules may provide
for recipients of tax credits under this section to be charged
fees to cover administrative costs of the tax credit program. The
fees collected shall be credited to the tax incentive programs
operating fund created in section 122.174 of the Revised Code. At
the time the director gives public notice under division (A) of
section 119.03 of the Revised Code of the adoption of the rules,
the director shall submit copies of the proposed rules to the
chairpersons of the standing committees on economic development in
the senate and the house of representatives.

(J) For the purposes of this section, a taxpayer may include
a partnership, a corporation that has made an election under
subchapter S of chapter one of subtitle A of the Internal Revenue
Code, or any other business entity through which income flows as a
distributive share to its owners. A partnership, S-corporation, or
other such business entity may elect to pass the credit received
under this section through to the persons to whom the income or
profit of the partnership, S-corporation, or other entity is
distributed. The election shall be made on the annual report
required under division (D)(6) of this section. The election
applies to and is irrevocable for the credit for which the report
is submitted. If the election is made, the credit shall be
apportioned among those persons in the same proportions as those
in which the income or profit is distributed.

(K) If the director of development services determines that a
taxpayer who has received a credit under this section is not
complying with the requirement under division (D)(3) of this
section, the director shall notify the tax credit authority of the
noncompliance. After receiving such a notice, and after giving the
taxpayer an opportunity to explain the noncompliance, the tax
credit authority may require the taxpayer to refund to this state
a portion of the credit in accordance with the following:

(1) If the taxpayer maintained operations at the project
location for a period less than or equal to the term of the
credit, an amount not exceeding one hundred per cent of the sum of
any credits allowed and received under this section;

(2) If the taxpayer maintained operations at the project
location for a period longer than the term of the credit, but less
than the greater of seven years or the term of the credit plus
three years, an amount not exceeding seventy-five per cent of the
sum of any credits allowed and received under this section.

In determining the portion of the tax credit to be refunded
to this state, the tax credit authority shall consider the effect
of market conditions on the taxpayer's project and whether the
taxpayer continues to maintain other operations in this state.
After making the determination, the authority shall certify the
amount to be refunded to the tax commissioner or superintendent of
insurance, as appropriate. If the amount is certified to the
commissioner, the commissioner shall make an assessment for that
amount against the taxpayer under Chapter 5726., 5733., 5747., or
5751. of the Revised Code. If the amount is certified to the
superintendent, the superintendent shall make an assessment for
that amount against the taxpayer under Chapter 5725. or 5729. of
the Revised Code. The time limitations on assessments under those
chapters do not apply to an assessment under this division, but
the commissioner or superintendent, as appropriate, shall make the
assessment within one year after the date the authority certifies
to the commissioner or superintendent the amount to be refunded.

(L) On or before the first day of August each year, the
director of development services shall submit a report to the
governor, the president of the senate, and the speaker of the
house of representatives on the tax credit program under this
section. The report shall include information on the number of
agreements that were entered into under this section during the
preceding calendar year, a description of the project that is the
subject of each such agreement, and an update on the status of
projects under agreements entered into before the preceding
calendar year.

(M) There is hereby created the tax credit authority, which
consists of the director of development
services and four other
members appointed as follows: the governor, the president of the
senate, and the speaker of the house of representatives each shall
appoint one member who shall be a specialist in economic
development; the governor also shall appoint a member who is a
specialist in taxation. Of the initial appointees, the members
appointed by the governor shall serve a term of two years; the
members appointed by the president of the senate and the speaker
of the house of representatives shall serve a term of four years.
Thereafter, terms of office shall be for four years. Initial
appointments to the authority shall be made within thirty days
after January 13, 1993. Each member shall serve on the authority
until the end of the term for which the member was appointed.
Vacancies shall be filled in the same manner provided for original
appointments. Any member appointed to fill a vacancy occurring
prior to the expiration of the term for which the member's
predecessor was appointed shall hold office for the remainder of
that term. Members may be reappointed to the authority. Members of
the authority shall receive their necessary and actual expenses
while engaged in the business of the authority. The director of
development
services shall serve as chairperson of the authority,
and the members annually shall elect a vice-chairperson from among
themselves. Three members of the authority constitute a quorum to
transact and vote on the business of the authority. The majority
vote of the membership of the authority is necessary to approve
any such business, including the election of the vice-chairperson.

The director of development services may appoint a
professional employee of the department of development services to
serve as the director's substitute at a meeting of the authority.
The director shall make the appointment in writing. In the absence
of the director from a meeting of the authority, the appointed
substitute shall serve as chairperson. In the absence of both the
director and the director's substitute from a meeting, the
vice-chairperson shall serve as chairperson.

(N) For purposes of the credits granted by this section
against the taxes imposed under sections 5725.18 and 5729.03 of
the Revised Code, "taxable year" means the period covered by the
taxpayer's annual statement to the superintendent of insurance.

Sec. 122.171. (A) As used in this section:

(1) "Capital investment project" means a plan of investment
at a project site for the acquisition, construction, renovation,
or repair of buildings, machinery, or equipment, or for
capitalized costs of basic research and new product development
determined in accordance with generally accepted accounting
principles, but does not include any of the following:

(a) Payments made for the acquisition of personal property
through operating leases;

(b) Project costs paid before January 1, 2002;

(c) Payments made to a related member as defined in section
5733.042 of the Revised Code or to a consolidated elected taxpayer
or a combined taxpayer as defined in section 5751.01 of the
Revised Code.

(2) "Eligible business" means a taxpayer and its related
members with Ohio operations satisfying all of the following:

(a) The taxpayer employs at least five hundred full-time
equivalent employees or has an annual payroll of at least
thirty-five million dollars at the time the tax credit authority
grants the tax credit under this section;

(b) The taxpayer makes or causes to be made payments for the
capital investment project of one of the following:

(i) If the taxpayer is engaged at the project site primarily
as a manufacturer, at least fifty million dollars in the aggregate
at the project site during a period of three consecutive calendar
years, including the calendar year that includes a day of the
taxpayer's taxable year or tax period with respect to which the
credit is granted;

(ii) If the taxpayer is engaged at the project site primarily
in significant corporate administrative functions, as defined by
the director of development services by rule, at least twenty
million dollars in the aggregate at the project site during a
period of three consecutive calendar years including the calendar
year that includes a day of the taxpayer's taxable year or tax
period with respect to which the credit is granted;

(iii) If the taxpayer is applying to enter into an agreement
for a tax credit authorized under division (B)(3) of this section,
at least five million dollars in the aggregate at the project site
during a period of three consecutive calendar years, including the
calendar year that includes a day of the taxpayer's taxable year
or tax period with respect to which the credit is granted.

(c) The taxpayer had a capital investment project reviewed
and approved by the tax credit authority as provided in divisions
(C), (D), and (E) of this section.

(3) "Full-time equivalent employees" means the quotient
obtained by dividing the total number of hours for which employees
were compensated for employment in the project by two thousand
eighty. "Full-time equivalent employees" shall exclude hours that
are counted for a credit under section 122.17 of the Revised Code.

(4) "Income tax revenue" means the total amount withheld
under section 5747.06 of the Revised Code by the taxpayer during
the taxable year, or during the calendar year that includes the
tax period, from the compensation of all employees employed in the
project whose hours of compensation are included in calculating
the number of full-time equivalent employees.

(5) "Manufacturer" has the same meaning as in section
5739.011 of the Revised Code.

(6) "Project site" means an integrated complex of facilities
in this state, as specified by the tax credit authority under this
section, within a fifteen-mile radius where a taxpayer is
primarily operating as an eligible business.

(7) "Related member" has the same meaning as in section
5733.042 of the Revised Code as that section existed on the
effective date of its amendment by Am. Sub. H.B. 215 of the 122nd
general assembly, September 29, 1997.

(8) "Taxable year" includes, in the case of a domestic or
foreign insurance company, the calendar year ending on the
thirty-first day of December preceding the day the superintendent
of insurance is required to certify to the treasurer of state
under section 5725.20 or 5729.05 of the Revised Code the amount of
taxes due from insurance companies.

(B) The tax credit authority created under section 122.17 of
the Revised Code may grant tax credits under this section for the
purpose of fostering job retention in this state. Upon application
by an eligible business and upon consideration of the
recommendation of the director of budget and management, tax
commissioner, the superintendent of insurance in the case of an
insurance company, and director of development services under
division (C) of this section, the tax credit authority may grant
the following credits against the tax imposed by section 5725.18,
5726.02, 5729.03, 5733.06, 5747.02, or 5751.02 of the Revised
Code:

(1) A nonrefundable credit to an eligible business;

(2) A refundable credit to an eligible business meeting the
following conditions, provided that the director of budget and
management, tax commissioner, superintendent of insurance in the
case of an insurance company, and director of development services
have recommended the granting of the credit to the tax credit
authority before July 1, 2011:

(a) The business retains at least one thousand full-time
equivalent employees at the project site.

(b) The business makes or causes to be made payments for a
capital investment project of at least twenty-five million dollars
in the aggregate at the project site during a period of three
consecutive calendar years, including the calendar year that
includes a day of the business' taxable year or tax period with
respect to which the credit is granted.

(c) In 2010, the business received a written offer of
financial incentives from another state of the United States that
the director determines to be sufficient inducement for the
business to relocate the business' operations from this state to
that state.

(3) A refundable credit to an eligible business with a total
annual payroll of at least twenty million dollars, provided that
the tax credit authority grants the tax credit on or after July 1,
2011, and before January 1, 2014.

The credits authorized in divisions (B)(1), (2), and (3) of
this section may be granted for a period up to fifteen taxable
years or, in the case of the tax levied by section 5751.02 of the
Revised Code, for a period of up to fifteen calendar years. The
credit amount for a taxable year or a calendar year that includes
the tax period for which a credit may be claimed equals the income
tax revenue for that year multiplied by the percentage specified
in the agreement with the tax credit authority. The percentage may
not exceed seventy-five per cent. The credit shall be claimed in
the order required under section 5725.98, 5726.98, 5729.98,
5733.98, 5747.98, or 5751.98 of the Revised Code. In determining
the percentage and term of the credit, the tax credit authority
shall consider both the number of full-time equivalent employees
and the value of the capital investment project. The credit amount
may not be based on the income tax revenue for a calendar year
before the calendar year in which the tax credit authority
specifies the tax credit is to begin, and the credit shall be
claimed only for the taxable years or tax periods specified in the
eligible business' agreement with the tax credit authority. In no
event shall the credit be claimed for a taxable year or tax period
terminating before the date specified in the agreement. Any credit
granted under this section against the tax imposed by section
5733.06 or 5747.02 of the Revised Code, to the extent not fully
utilized against such tax for taxable years ending prior to 2008,
shall automatically be converted without any action taken by the
tax credit authority to a credit against the tax levied under
Chapter 5751. of the Revised Code for tax periods beginning on or
after July 1, 2008, provided that the person to whom the credit
was granted is subject to such tax. The converted credit shall
apply to those calendar years in which the remaining taxable years
specified in the agreement end.

If a nonrefundable credit allowed under division (B)(1) of
this section for a taxable year or tax period exceeds the
taxpayer's tax liability for that year or period, the excess may
be carried forward for the three succeeding taxable or calendar
years, but the amount of any excess credit allowed in any taxable
year or tax period shall be deducted from the balance carried
forward to the succeeding year or period.

(C) A taxpayer that proposes a capital investment project to
retain jobs in this state may apply to the tax credit authority to
enter into an agreement for a tax credit under this section. The
director of development services shall prescribe the form of the
application. After receipt of an application, the authority shall
forward copies of the application to the director of budget and
management, the tax commissioner, the superintendent of insurance
in the case of an insurance company, and the director of
development services, each of whom shall review the application to
determine the economic impact the proposed project would have on
the state and the affected political subdivisions and shall submit
a summary of their determinations and recommendations to the
authority.

(D) Upon review and consideration of the determinations and
recommendations described in division (C) of this section, the tax
credit authority may enter into an agreement with the taxpayer for
a credit under this section if the authority determines all of the
following:

(1) The taxpayer's capital investment project will result in
the retention of employment in this state.

(2) The taxpayer is economically sound and has the ability to
complete the proposed capital investment project.

(3) The taxpayer intends to and has the ability to maintain
operations at the project site for at least the greater of (a) the
term of the credit plus three years, or (b) seven years.

(4) Receiving the credit is a major factor in the taxpayer's
decision to begin, continue with, or complete the project.

(5) If the taxpayer is applying to enter into an agreement
for a tax credit authorized under division (B)(3) of this section,
the taxpayer's capital investment project will be located in the
political subdivision in which the taxpayer maintains its
principal place of business.

(E) An agreement under this section shall include all of the
following:

(1) A detailed description of the project that is the subject
of the agreement, including the amount of the investment, the
period over which the investment has been or is being made, the
number of full-time equivalent employees at the project site, and
the anticipated income tax revenue to be generated.

(2) The term of the credit, the percentage of the tax credit,
the maximum annual value of tax credits that may be allowed each
year, and the first year for which the credit may be claimed.

(3) A requirement that the taxpayer maintain operations at
the project site for at least the greater of (a) the term of the
credit plus three years, or (b) seven years.

(4)(a) In the case of a credit granted under division (B)(1)
of this section, a requirement that the taxpayer retain at least
five hundred full-time equivalent employees at the project site
and within this state for the entire term of the credit, or a
requirement that the taxpayer maintain an annual payroll of at
least thirty-five million dollars for the entire term of the
credit;

(b) In the case of a credit granted under division (B)(2) of
this section, a requirement that the taxpayer retain at least one
thousand full-time equivalent employees at the project site and
within this state for the entire term of the credit;

(c) In the case of a credit granted under division (B)(3) of
this section, either of the following:

(i) A requirement that the taxpayer retain at least five
hundred full-time equivalent employees at the project site and
within this state for the entire term of the credit and a
requirement that the taxpayer maintain an annual payroll of at
least twenty million dollars for the entire term of the credit;

(ii) A requirement that the taxpayer maintain an annual
payroll of at least thirty-five million dollars for the entire
term of the credit.

(5) A requirement that the taxpayer annually report to the
director of development services employment, tax withholding,
capital investment, and other information the director needs to
perform the director's duties under this section.

(6) A requirement that the director of development services
annually review the annual reports of the taxpayer to verify the
information reported under division (E)(5) of this section and
compliance with the agreement. Upon verification, the director
shall issue a certificate to the taxpayer stating that the
information has been verified and identifying the amount of the
credit for the taxable year or calendar year that includes the tax
period. In determining the number of full-time equivalent
employees, no position shall be counted that is filled by an
employee who is included in the calculation of a tax credit under
section 122.17 of the Revised Code.

(7) A provision providing that the taxpayer may not relocate
a substantial number of employment positions from elsewhere in
this state to the project site unless the director of development
services determines that the taxpayer notified the legislative
authority of the county, township, or municipal corporation from
which the employment positions would be relocated.

For purposes of this section, the movement of an employment
position from one political subdivision to another political
subdivision shall be considered a relocation of an employment
position unless the movement is confined to the project site. The
transfer of an employment position from one political subdivision
to another political subdivision shall not be considered a
relocation of an employment position if the employment position in
the first political subdivision is replaced by another employment
position.

(8) A waiver by the taxpayer of any limitations periods
relating to assessments or adjustments resulting from the
taxpayer's failure to comply with the agreement.

(F) If a taxpayer fails to meet or comply with any condition
or requirement set forth in a tax credit agreement, the tax credit
authority may amend the agreement to reduce the percentage or term
of the credit. The reduction of the percentage or term may take
effect in the current taxable or calendar year.

(G) Financial statements and other information submitted to
the department of development services or the tax credit authority
by an applicant for or recipient of a tax credit under this
section, and any information taken for any purpose from such
statements or information, are not public records subject to
section 149.43 of the Revised Code. However, the chairperson of
the authority may make use of the statements and other information
for purposes of issuing public reports or in connection with court
proceedings concerning tax credit agreements under this section.
Upon the request of the tax commissioner, or the superintendent of
insurance in the case of an insurance company, the chairperson of
the authority shall provide to the commissioner or superintendent
any statement or other information submitted by an applicant for
or recipient of a tax credit in connection with the credit. The
commissioner or superintendent shall preserve the confidentiality
of the statement or other information.

(H) A taxpayer claiming a tax credit under this section shall
submit to the tax commissioner or, in the case of an insurance
company, to the superintendent of insurance, a copy of the
director of development'sdevelopment services' certificate of
verification under division (E)(6) of this section with the
taxpayer's tax report or return for the taxable year or for the
calendar year that includes the tax period. Failure to submit a
copy of the certificate with the report or return does not
invalidate a claim for a credit if the taxpayer submits a copy of
the certificate to the commissioner or superintendent within sixty
days after the commissioner or superintendent requests it.

(I) For the purposes of this section, a taxpayer may include
a partnership, a corporation that has made an election under
subchapter S of chapter one of subtitle A of the Internal Revenue
Code, or any other business entity through which income flows as a
distributive share to its owners. A partnership, S-corporation, or
other such business entity may elect to pass the credit received
under this section through to the persons to whom the income or
profit of the partnership, S-corporation, or other entity is
distributed. The election shall be made on the annual report
required under division (E)(5) of this section. The election
applies to and is irrevocable for the credit for which the report
is submitted. If the election is made, the credit shall be
apportioned among those persons in the same proportions as those
in which the income or profit is distributed.

(J) If the director of development services determines that a
taxpayer that received a tax credit under this section is not
complying with the requirement under division (E)(3) of this
section, the director shall notify the tax credit authority of the
noncompliance. After receiving such a notice, and after giving the
taxpayer an opportunity to explain the noncompliance, the
authority may terminate the agreement and require the taxpayer to
refund to the state all or a portion of the credit claimed in
previous years, as follows:

(1) If the taxpayer maintained operations at the project site
for less than or equal to the term of the credit, an amount not to
exceed one hundred per cent of the sum of any tax credits allowed
and received under this section.

(2) If the taxpayer maintained operations at the project site
longer than the term of the credit, but less than the greater of
(a) the term of the credit plus three years, or (b) seven years,
the amount required to be refunded shall not exceed seventy-five
per cent of the sum of any tax credits allowed and received under
this section.

In determining the portion of the credit to be refunded to
this state, the authority shall consider the effect of market
conditions on the taxpayer's project and whether the taxpayer
continues to maintain other operations in this state. After making
the determination, the authority shall certify the amount to be
refunded to the tax commissioner or the superintendent of
insurance. If the taxpayer is not an insurance company, the
commissioner shall make an assessment for that amount against the
taxpayer under Chapter 5726., 5733., 5747., or 5751. of the
Revised Code. If the taxpayer is an insurance company, the
superintendent of insurance shall make an assessment under section
5725.222 or 5729.102 of the Revised Code. The time limitations on
assessments under those chapters and sections do not apply to an
assessment under this division, but the commissioner or
superintendent shall make the assessment within one year after the
date the authority certifies to the commissioner or superintendent
the amount to be refunded.

(K) The director of development services, after consultation
with the tax commissioner and the superintendent of insurance and
in accordance with Chapter 119. of the Revised Code, shall adopt
rules necessary to implement this section. The rules may provide
for recipients of tax credits under this section to be charged
fees to cover administrative costs of the tax credit program. The
fees collected shall be credited to the tax incentive programs
operating fund created in section 122.174 of the Revised Code. At
the time the director gives public notice under division (A) of
section 119.03 of the Revised Code of the adoption of the rules,
the director shall submit copies of the proposed rules to the
chairpersons of the standing committees on economic development in
the senate and the house of representatives.

(L) On or before the first day of August of each year, the
director of development services shall submit a report to the
governor, the president of the senate, and the speaker of the
house of representatives on the tax credit program under this
section. The report shall include information on the number of
agreements that were entered into under this section during the
preceding calendar year, a description of the project that is the
subject of each such agreement, and an update on the status of
projects under agreements entered into before the preceding
calendar year.

(M)(1) The aggregate amount of tax credits issued under
division (B)(1) of this section during any calendar year for
capital investment projects reviewed and approved by the tax
credit authority may not exceed the following amounts:

(a) For 2010, thirteen million dollars;

(b) For 2011 through 2023, the amount of the limit for the
preceding calendar year plus thirteen million dollars;

(c) For 2024 and each year thereafter, one hundred
ninety-five million dollars.

(2) The aggregate amount of tax credits authorized under
divisions (B)(2) and (3) of this section and allowed to be claimed
by taxpayers in any calendar year for capital improvement projects
reviewed and approved by the tax credit authority in 2011, 2012,
and 2013 combined shall not exceed twenty-five million dollars. An
amount equal to the aggregate amount of credits first authorized
in calendar year 2011, 2012, and 2013 may be claimed over the
ensuing period up to fifteen years, subject to the terms of
individual tax credit agreements.

The limitations in division (M) of this section do not apply
to credits for capital investment projects approved by the tax
credit authority before July 1, 2009.

(N) Notwithstanding any contrary provision of the agreement
between the eligible business and the tax credit authority, any
credit granted under this section against the tax imposed by
section 5725.18, 5729.03, 5733.06, 5747.02, or 5751.02 of the
Revised Code to an eligible business, at the election of the
eligible business and without any action by the tax credit
authority, may be shared by the taxpayer or any related member or
members that comprise the eligible business, which taxpayer or
related members may claim the credit against the taxes imposed by
section 5725.18, 5726.02, 5729.03, 5733.06, 5747.02, or 5751.02 of
the Revised Code. The credits may be allocated among the taxpayer
and related members in such manner as the eligible business
elects. This division applies to credits granted before, on, or
after the effective date of H.B. 510 of the 129th general
assembly. Credits granted before that effective date that are
shared and allocated under this division may be claimed in those
calendar years in which the remaining taxable years specified in
the agreement end.

Sec. 122.85. (A) As used in this section and in sections
5726.55, 5733.59 and, 5747.66, and 5751.54 of the Revised Code:

(1) "Tax credit-eligible production" means a motion picture
production certified by the director of development services under
division (B) of this section as qualifying the motion picture
company for a tax credit under section 5726.55, 5733.59 or,
5747.66, or 5751.54 of the Revised Code.

(2) "Certificate owner" means a motion picture company to
which a tax credit certificate is issued.

(3) "Motion picture company" means an individual,
corporation, partnership, limited liability company, or other form
of business association producing a motion picture.

(4) "Eligible production expenditures" means expenditures
made after June 30, 2009, for goods or services purchased and
consumed in this state by a motion picture company directly for
the production of a tax credit-eligible production.

"Eligible production expenditures" includes, but is not
limited to, expenditures for resident and nonresident cast and
crew wages, accommodations, costs of set construction and
operations, editing and related services, photography, sound
synchronization, lighting, wardrobe, makeup and accessories, film
processing, transfer, sound mixing, special and visual effects,
music, location fees, and the purchase or rental of facilities and
equipment.

(5) "Motion picture" means entertainment content created in
whole or in part within this state for distribution or exhibition
to the general public, including, but not limited to,
feature-length films; documentaries; long-form, specials,
miniseries, series, and interstitial television programming;
interactive web sites; sound recordings; videos; music videos;
interactive television; interactive games; videogamesvideo games;
commercials; any format of digital media; and any trailer, pilot,
video teaser, or demo created primarily to stimulate the sale,
marketing, promotion, or exploitation of future investment in
either a product or a motion picture by any means and media in any
digital media format, film, or videotape, provided the motion
picture qualifies as a motion picture. "Motion picture" does not
include any television program created primarily as news, weather,
or financial market reports, a production featuring current events
or sporting events, an awards show or other gala event, a
production whose sole purpose is fundraising, a long-form
production that primarily markets a product or service or in-house
corporate advertising or other similar productions, a production
for purposes of political advocacy, or any production for which
records are required to be maintained under 18 U.S.C. 2257 with
respect to sexually explicit content.

(B) For the purpose of encouraging and developing a strong
film industry in this state, the director of development services
may certify a motion picture produced by a motion picture company
as a tax credit-eligible production. In the case of a television
series, the director may certify the production of each episode of
the series as a separate tax credit-eligible production. A motion
picture company shall apply for certification of a motion picture
as a tax credit-eligible production on a form and in the manner
prescribed by the director. Each application shall include the
following information:

(1) The name and telephone number of the motion picture
production company;

(2) The name and telephone number of the company's contact
person;

(3) A list of the first preproduction date through the last
production date in Ohio;

(4) The Ohio production office address and telephone number;

(5) The total production budget of the motion picture;

(6) The total budgeted eligible production expenditures and
the percentage that amount is of the total production budget of
the motion picture;

(7) The total percentage of the motion picture being shot in
Ohio;

(8) The level of employment of cast and crew who reside in
Ohio;

(9) A synopsis of the script;

(10) The shooting script;

(11) A creative elements list that includes the names of the
principal cast and crew and the producer and director;

(12) Documentation of financial ability to undertake and
complete the motion picture;

(13) Estimated value of the tax credit based upon total
budgeted eligible production expenditures;

(14) Any other information considered necessary by the
director.

Within ninety days after certification of a motion picture as
a tax credit-eligible production, and any time thereafter upon the
director'sdirector of development services' request, the motion
picture company shall present to the director of development
sufficient evidence of reviewable progress. If the motion picture
company fails to present sufficient evidence, the director of
development may rescind the certification. Upon rescission, the
director shall notify the applicant that the certification has
been rescinded. Nothing in this section prohibits an applicant
whose tax credit-eligible production certification has been
rescinded from submitting a subsequent application for
certification.

(C)(1) A motion picture company whose motion picture has been
certified as a tax credit-eligible production may apply to the
director of development services on or after July 1, 2009, for a
refundable credit against the tax imposed by section 5726.02,
5733.06 or, 5747.02, or 5751.02 of the Revised Code. The director
in consultation with the tax commissioner shall prescribe the form
and manner of the application and the information or documentation
required to be submitted with the application.

The credit is determined as follows:

(a) If the total budgeted eligible production expenditures
stated in the application submitted under division (B) of this
section or the actual eligible production expenditures as finally
determined under division (D) of this section, whichever is least,
is less than or equal to three hundred thousand dollars, no credit
is allowed;

(b) If the total budgeted eligible production expenditures
stated in the application submitted under division (B) of this
section or the actual eligible production expenditures as finally
determined under division (D) of this section, whichever is least,
is greater than three hundred thousand dollars, the credit equals
the sum of the following, subject to the limitation in division
(C)(4) of this section:

(i) Twenty-five per cent of the least of such budgeted or
actual eligible expenditure amounts excluding budgeted or actual
eligible expenditures for resident cast and crew wages;

(ii) Thirty-five per cent of budgeted or actual eligible
expenditures for resident cast and crew wages.

(2) Except as provided in division (C)(4) of this section, if
the director of development services approves a motion picture
company's application for a credit, the director shall issue a tax
credit certificate to the company. The director in consultation
with the tax commissioner shall prescribe the form and manner of
issuing certificates. The director shall assign a unique
identifying number to each tax credit certificate and shall record
the certificate in a register devised and maintained by the
director for that purpose. The certificate shall state the amount
of the eligible production expenditures on which the credit is
based and the amount of the credit. Upon the issuance of a
certificate, the director shall certify to the tax commissioner
the name of the applicant, the amount of eligible production
expenditures shown on the certificate, and any other information
required by the rules adopted to administer this section.

(3) The amount of eligible production expenditures for which
a tax credit may be claimed is subject to inspection and
examination by the tax commissioner or employees of the
commissioner under section 5703.19 of the Revised Code and any
other applicable law. Once the eligible production expenditures
are finally determined under section 5703.19 of the Revised Code
and division (D) of this section, the credit amount is not subject
to adjustment unless the director determines an error was
committed in the computation of the credit amount.

(4) No tax credit certificate may be issued before the
completion of the tax credit-eligible production. For the fiscal
biennium beginning July 1, 2009, and ending June 30, 2011, not
more than thirty million dollars of tax credit may be allowed, of
which not more than ten million dollars of tax credit may be
allowed in the first year of the biennium. In succeeding fiscal
biennia, not more than twenty million dollars of tax credit may be
allowed per fiscal biennium, and not more than ten million dollars
may be allowed in the first year of the biennium. At any time, not
more than five million dollars of tax credit may be allowed per
tax credit-eligible production.

(D) A motion picture company whose motion picture has been
certified as a tax credit-eligible production shall engage, at the
company's expense, an independent certified public accountant to
examine the company's production expenditures to identify the
expenditures that qualify as eligible production expenditures. The
certified public accountant shall issue a report to the company
and to the director of development services certifying the
company's eligible production expenditures and any other
information required by the director. Upon receiving and examining
the report, the director may disallow any expenditure the director
determines is not an eligible production expenditure. If the
director disallows an expenditure, the director shall issue a
written notice to the motion picture production company stating
that the expenditure is disallowed and the reason for the
disallowance. Upon examination of the report and disallowance of
any expenditures, the director shall determine finally the lesser
of the total budgeted eligible production expenditures stated in
the application submitted under division (B) of this section or
the actual eligible production expenditures for the purpose of
computing the amount of the credit.

(E) No credit shall be allowed under section 5726.55, 5733.59
or, 5747.66, or 5751.54 of the Revised Code unless the director
has reviewed the report and made the determination prescribed by
division (D) of this section.

(F) This state reserves the right to refuse the use of this
state's name in the credits of any tax credit-eligible motion
picture production.

(G)(1) The director of development services in consultation
with the tax commissioner shall adopt rules for the administration
of this section, including rules setting forth and governing the
criteria for determining whether a motion picture production is a
tax credit-eligible production; activities that constitute the
production of a motion picture; reporting sufficient evidence of
reviewable progress; expenditures that qualify as eligible
production expenditures; a competitive process for approving
credits; and consideration of geographic distribution of credits.
The rules shall be adopted under Chapter 119. of the Revised Code.

(2) The director may require a reasonable application fee to
cover administrative costs of the tax credit program. The fees
collected shall be credited to the motion picture tax credit
program operating fund, which is hereby created in the state
treasury. The motion picture tax credit program operating fund
shall consist of all grants, gifts, fees, and contributions made
to the director of development for marketing and promotion of the
motion picture industry within this state. The director of
development shall use money in the fund to pay expenses related to
the administration of the Ohio film office and the credit
authorized by this section and sections 5726.55., 5733.59 and,
5747.66, and 5751.54 of the Revised Code.

Sec. 145.114. (A) As used in this section and in section
145.116 of the Revised Code:

(1) "Agent" means a dealer, as defined in section 1707.01 of
the Revised Code, who is licensed under sections 1707.01 to
1707.45 of the Revised Code or under comparable laws of another
state or of the United States.

(2) "Minority business enterprise" has the same meaning as in
section 122.71 of the Revised Code.

(3) "Ohio-qualified agent" means an agent designated as such
by the public employees retirement board.

(4) "Ohio-qualified investment manager" means an investment
manager designated as such by the public employees retirement
board.

(5) "Principal place of business" means an office in which
the agent regularly provides securities or investment advisory
services and solicits, meets with, or otherwise communicates with
clients.

(B) The public employees retirement board shall, for the
purposes of this section, designate an agent as an Ohio-qualified
agent if the agent meets all of the following requirements:

(1) The agent is subject to taxation under Chapter 5725.,
5726., 5733., or 5747., or 5751. of the Revised Code;

(2) The agent is authorized to conduct business in this
state;

(3) The agent maintains a principal place of business in this
state and employs at least five residents of this state.

(C) The public employees retirement board shall adopt and
implement a written policy to establish criteria and procedures
used to select agents to execute securities transactions on behalf
of the retirement system. The policy shall address each of the
following:

(1) Commissions charged by the agent, both in the aggregate
and on a per share basis;

(2) The execution speed and trade settlement capabilities of
the agent;

(3) The responsiveness, reliability, and integrity of the
agent;

(4) The nature and value of research provided by the agent;

(5) Any special capabilities of the agent.

(D)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified agents for the execution of domestic equity and
fixed income trades on behalf of the retirement system, when an
Ohio-qualified agent offers quality, services, and safety
comparable to other agents otherwise available to the board and
meets the criteria established under division (C) of this section.

(2) The board shall review, at least annually, the
performance of the agents that execute securities transactions on
behalf of the board.

(3) The board shall determine whether an agent is an
Ohio-qualified agent, meets the criteria established by the board
pursuant to division (C) of this section, and offers quality,
services, and safety comparable to other agents otherwise
available to the board. The board's determination shall be final.

(E) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each agent designated as an Ohio-qualified
agent under this section;

(2) The name of each agent that executes securities
transactions on behalf of the board;

(3) The amount of equity and fixed-income trades that are
executed by Ohio-qualified agents, expressed as a percentage of
all equity and fixed-income trades that are executed by agents on
behalf of the board;

(4) The compensation paid to Ohio-qualified agents, expressed
as a percentage of total compensation paid to all agents that
execute securities transactions on behalf of the board;

(5) The amount of equity and fixed-income trades that are
executed by agents that are minority business enterprises,
expressed as a percentage of all equity and fixed-income trades
that are executed by agents on behalf of the board;

(6) Any other information requested by the Ohio retirement
study council regarding the board's use of agents.

Sec. 145.116. (A) The public employees retirement board
shall, for the purposes of this section, designate an investment
manager as an Ohio-qualified investment manager if the investment
manager meets all of the following requirements:

(1) The investment manager is subject to taxation under
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised
Code;

(2) The investment manager meets one of the following
requirements:

(a) Has its corporate headquarters or principal place of
business in this state;

(b) Employs at least five hundred individuals in this state;

(c) Has a principal place of business in this state and
employs at least 20 residents of this state.

(B)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified investment managers, when an Ohio-qualified
investment manager offers quality, services, and safety comparable
to other investment managers otherwise available to the board. The
policy shall also provide for the following:

(a) A process whereby the board can develop a list of
Ohio-qualified investment managers and their investment products;

(b) A process whereby the board can give public notice to
Ohio-qualified investment managers of the board's search for an
investment manager that includes the board's search criteria.

(2) The board shall determine whether an investment manager
is an Ohio-qualified investment manager and whether the investment
manager offers quality, services, and safety comparable to other
investment managers otherwise available to the board. The board's
determination shall be final.

(C) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each investment manager designated as an
Ohio-qualified investment manager under this section;

(2) The name of each investment manager with which the board
contracts;

(3) The amount of assets managed by Ohio-qualified investment
managers, expressed as a percentage of the total assets held by
the retirement system and as a percentage of assets managed by
investment managers with which the board has contracted;

(4) The compensation paid to Ohio-qualified investment
managers, expressed as a percentage of total compensation paid to
all investment managers with which the board has contracted;

(5) Any other information requested by the Ohio retirement
study council regarding the board's use of investment managers.

Sec. 149.311. (A) As used in this section:

(1) "Historic building" means a building, including its
structural components, that is located in this state and that is
either individually listed on the national register of historic
places under 16 U.S.C. 470a, located in a registered historic
district, and certified by the state historic preservation officer
as being of historic significance to the district, or is
individually listed as aan historic landmark designated by a
local government certified under 16 U.S.C. 470a(c).

(2) "Qualified rehabilitation expenditures" means
expenditures paid or incurred during the rehabilitation period,
and before and after that period as determined under 26 U.S.C. 47,
by an owner of aan historic building to rehabilitate the
building. "Qualified rehabilitation expenditures" includes
architectural or engineering fees paid or incurred in connection
with the rehabilitation, and expenses incurred in the preparation
of nomination forms for listing on the national register of
historic places. "Qualified rehabilitation expenditures" does not
include any of the following:

(b) Expenditures attributable to work done to facilities
related to the building, such as parking lots, sidewalks, and
landscaping;

(c) New building construction costs.

(3) "Owner" of aan historic building means a person holding
the fee simple interest in the building. "Owner" does not include
the state or a state agency, or any political subdivision as
defined in section 9.23 of the Revised Code.

(4) "Certificate owner" means the owner of aan historic
building to which a rehabilitation tax credit certificate was
issued under this section.

(5) "Registered historic district" means aan historic
district listed in the national register of historic places under
16 U.S.C. 470a, aan historic district designated by a local
government certified under 16 U.S.C. 470a(c), or a local historic
district certified under 36 C.F.R. 67.8 and 67.9.

(6) "Rehabilitation" means the process of repairing or
altering aan historic building or buildings, making possible an
efficient use while preserving those portions and features of the
building and its site and environment that are significant to its
historic, architectural, and cultural values.

(7) "Rehabilitation period" means one of the following:

(a) If the rehabilitation initially was not planned to be
completed in stages, a period chosen by the owner not to exceed
twenty-four months during which rehabilitation occurs;

(b) If the rehabilitation initially was planned to be
completed in stages, a period chosen by the owner not to exceed
sixty months during which rehabilitation occurs. Each stage shall
be reviewed as a phase of a rehabilitation as determined under 26
C.F.R. 1.48-12 or a successor to that section.

(8) "State historic preservation officer" or "officer" means
the state historic preservation officer appointed by the governor
under 16 U.S.C. 470a.

(B) The owner of aan historic building may apply to the
director of development services for a rehabilitation tax credit
certificate for qualified rehabilitation expenditures paid or
incurred after April 4, 2007, for rehabilitation of aan historic
building. The form and manner of filing such applications shall be
prescribed by rule of the director of development. Each
application shall state the amount of qualified rehabilitation
expenditures the applicant estimates will be paid or incurred. The
director may require applicants to furnish documentation of such
estimates.

The director, after consultation with the tax commissioner
and in accordance with Chapter 119. of the Revised Code, shall
adopt rules that establish all of the following:

(1) Forms and procedures by which applicants may apply for
rehabilitation tax credit certificates;

(2) Criteria for reviewing, evaluating, and approving
applications for certificates within the limitations under
division (D) of this section, criteria for assuring that the
certificates issued encompass a mixture of high and low qualified
rehabilitation expenditures, and criteria for issuing certificates
under division (C)(3)(b) of this section;

(3) Eligibility requirements for obtaining a certificate
under this section;

(4) The form of rehabilitation tax credit certificates;

(5) Reporting requirements and monitoring procedures;

(6) Procedures and criteria for conducting cost-benefit
analyses of historic buildings that are the subjects of
applications filed under this section. The purpose of a
cost-benefit analysis shall be to determine whether rehabilitation
of the historic building will result in a net revenue gain in
state and local taxes once the building is used.

(7) Any other rules necessary to implement and administer
this section.

(C) The director of development services shall review the
applications with the assistance of the state historic
preservation officer and determine whether all of the following
criteria are met:

(1) That the building that is the subject of the application
is aan historic building and the applicant is the owner of the
building;

(2) That the rehabilitation will satisfy standards prescribed
by the United States secretary of the interior under 16 U.S.C.
470, et seq., as amended, and 36 C.F.R. 67.7 or a successor to
that section;

(3) That receiving a rehabilitation tax credit certificate
under this section is a major factor in:

(a) The applicant's decision to rehabilitate the historic
building; or

(b) To increase the level of investment in such
rehabilitation.

An applicant shall demonstrate to the satisfaction of the
state historic preservation officer and director of development
services that the rehabilitation will satisfy the standards
described in division (C)(2) of this section before the applicant
begins the physical rehabilitation of the historic building.

(D)(1) If the director of development services determines
that an application meets the criteria in divisions (C)(1), (2),
and (3) of this section, the director shall conduct a cost-benefit
analysis for the historic building that is the subject of the
application to determine whether rehabilitation of the historic
building will result in a net revenue gain in state and local
taxes once the building is used. The director shall consider the
results of the cost-benefit analysis in determining whether to
approve the application. The director shall also consider the
potential economic impact and the regional distributive balance of
the credits throughout the state. The director may approve an
application only after completion of the cost-benefit analysis.

(2) A rehabilitation tax credit certificate shall not be
issued for an amount greater than the estimated amount furnished
by the applicant on the application for such certificate and
approved by the director. The director shall not approve more than
a total of sixty million dollars of rehabilitation tax credits per
fiscal year but the director may reallocate unused tax credits
from a prior fiscal year for new applicants and such reallocated
credits shall not apply toward the dollar limit of this division.

(3) For rehabilitations with a rehabilitation period not
exceeding twenty-four months as provided in division (A)(7)(a) of
this section, a rehabilitation tax credit certificate shall not be
issued before the rehabilitation of the historic building is
completed.

(4) For rehabilitations with a rehabilitation period not
exceeding sixty months as provided in division (A)(7)(b) of this
section, a rehabilitation tax credit certificate shall not be
issued before a stage of rehabilitation is completed. After all
stages of rehabilitation are completed, if the director cannot
determine that the criteria in division (C) of this section are
satisfied for all stages of rehabilitations, the director shall
certify this finding to the tax commissioner, and any
rehabilitation tax credits received by the applicant shall be
repaid by the applicant and may be collected by assessment as
unpaid tax by the commissioner.

(5) The director of development services shall require the
applicant to provide a third-party cost certification by a
certified public accountant of the actual costs attributed to the
rehabilitation of the historic building when qualified
rehabilitation expenditures exceed two hundred thousand dollars.

If an applicant whose application is approved for receipt of
a rehabilitation tax credit certificate fails to provide to the
director of development sufficient evidence of reviewable
progress, including a viable financial plan, copies of final
construction drawings, and evidence that the applicant has
obtained all historic approvals within twelve months after the
date the applicant received notification of approval, and if the
applicant fails to provide evidence to the director of development
that the applicant has secured and closed on financing for the
rehabilitation within eighteen months after receiving notification
of approval, the director may rescind the approval of the
application. The director shall notify the applicant if the
approval has been rescinded. Credits that would have been
available to an applicant whose approval was rescinded shall be
available for other qualified applicants. Nothing in this division
prohibits an applicant whose approval has been rescinded from
submitting a new application for a rehabilitation tax credit
certificate.

(E) Issuance of a certificate represents a finding by the
director of development services of the matters described in
divisions (C)(1), (2), and (3) of this section only; issuance of a
certificate does not represent a verification or certification by
the director of the amount of qualified rehabilitation
expenditures for which a tax credit may be claimed under section
5725.151, 5725.34, 5726.52, 5729.17, 5733.47, or 5747.76 of the
Revised Code. The amount of qualified rehabilitation expenditures
for which a tax credit may be claimed is subject to inspection and
examination by the tax commissioner or employees of the
commissioner under section 5703.19 of the Revised Code and any
other applicable law. Upon the issuance of a certificate, the
director shall certify to the tax commissioner, in the form and
manner requested by the tax commissioner, the name of the
applicant, the amount of qualified rehabilitation expenditures
shown on the certificate, and any other information required by
the rules adopted under this section.

(F)(1) On or before the first day of April each year, the
director of development services and tax commissioner jointly
shall submit to the president of the senate and the speaker of the
house of representatives a report on the tax credit program
established under this section and sections 5725.151, 5725.34,
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code. The
report shall present an overview of the program and shall include
information on the number of rehabilitation tax credit
certificates issued under this section during the preceding fiscal
year, an update on the status of each historic building for which
an application was approved under this section, the dollar amount
of the tax credits granted under sections 5725.151, 5725.34,
5726.52, 5729.17, 5733.47, and 5747.76 of the Revised Code, and
any other information the director and commissioner consider
relevant to the topics addressed in the report.

(2) On or before December 1, 2015, the director of
development services and tax commissioner jointly shall submit to
the president of the senate and the speaker of the house of
representatives a comprehensive report that includes the
information required by division (F)(1) of this section and a
detailed analysis of the effectiveness of issuing tax credits for
rehabilitating historic buildings. The report shall be prepared
with the assistance of an economic research organization jointly
chosen by the director and commissioner.

(G) There is hereby created in the state treasury the
historic rehabilitation tax credit operating fund. The director of
development services is authorized to charge reasonable
application and other fees in connection with the administration
of tax credits authorized by this section and sections 5725.151,
5725.34,
5726.52, 5729.17, 5733.44, and 5747.76 of the Revised
Code. Any such fees collected shall be credited to the fund and
used to pay reasonable costs incurred by the department of
development services in administering this section and sections
5725.151, 5725.34, 5726.52, 5729.17, 5733.44, and 5747.76 of the
Revised Code.

The Ohio historic preservation office is authorized to charge
reasonable fees in connection with its review and approval of
applications under this section. Any such fees collected shall be
credited to the fund and used to pay administrative costs incurred
by the Ohio historic preservation office pursuant to this section.

Sec. 150.01. (A) As used in this chapter:

(1) "Authority" means the Ohio venture capital authority
created under section 150.02 of the Revised Code.

(2) "Issuer" means a port authority organized and existing
under applicable provisions of Chapter 4582. of the Revised Code
that, pursuant to an agreement entered into under division (E) of
section 150.02 of the Revised Code, issues or issued obligations
to fund one or more loans to the program fund.

(3) "Lender" means any person that lends money to the program
fund as provided in this chapter and includes any issuer and any
trustee.

(4) "Loss" means a loss incurred with respect to a lender's
loan to the program fund. Such a loss is incurred only if and to
the extent a program administrator fails to satisfy its
obligations to the lender to make timely payments of principal or
interest as provided in the loan agreement between the lender and
the program administrator. "Loss" does not include either of the
following:

(a) Any loss incurred by the program fund, including a loss
attributable to any investment made by a program administrator;

(b) Any loss of the capital required to be provided by a
program administrator, or income accruing to that capital, under
the agreement entered into under division (B) of section 150.05 of
the Revised Code.

(5) "Ohio-based business enterprise" means a person that is
engaged in business, that employs at least one individual on a
full-time or part-time basis at a place of business in this state,
including a person engaged in business if that person is a
self-employed individual, and that is in the seed or early stage
of business development requiring initial or early stage funding
or is an established business enterprise developing new methods or
technologies.

(6) "Ohio-based venture capital fund" means a venture capital
fund having its principal office in this state, where the majority
of the fund's staff are employed and where at least one investment
professional is employed who has at least five years of experience
in venture capital investment.

(7) "Program fund" means the fund created under section
150.03 of the Revised Code.

(8) "Research and development purposes" has the same meaning
as used in Section 2p of Article VIII, Ohio Constitution, and
includes the development of sites and facilities in this state for
and in support of those research and development purposes.

(9) "Trustee" means a trust company or a bank with corporate
trust powers, in either case having a place of business in this
state, being a taxpayer under Chapter 5707., 5725., 5726., 5727.,
5729., 5733., or 5747 of the Revised Code at the time it may claim
and receive a tax credit under division (E) of section 150.07 of
the Revised Code, and acting in its capacity as a trustee pursuant
to a trust agreement under which an issuer issues obligations to
fund loans to the program fund.

(B) The general assembly declares that its purpose in
enacting Chapter 150. of the Revised Code is to increase the
amount of private investment capital available in this state for
Ohio-based business enterprises in the seed or early stages of
business development and requiring initial or early stage funding,
as well as established Ohio-based business enterprises developing
new methods or technologies, including the promotion of research
and development purposes, thereby increasing employment, creating
additional wealth, and otherwise benefiting the economic welfare
of the people of this state. Accordingly, it is the intention of
the general assembly that the program fund make investments in
support of Ohio-based business enterprises in accordance with the
investment policy authorized and required under section 150.03 of
the Revised Code, and that the Ohio venture capital authority
focus its investment policy principally on venture capital funds
investing in such Ohio-based business enterprises. The general
assembly finds and determines that this chapter and the investment
policy, and actions taken under and consistent therewith, will
promote and implement the public purposes of Section 2p of Article
VIII, Ohio Constitution.

Sec. 150.07. (A) For the purpose stated in section 150.01 of
the Revised Code, the authority may authorize a lender to claim
one of the refundable tax credits allowed under section 5707.031,
5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80 of the
Revised Code. The credits shall be authorized by a written
contract with the lender. The contract shall specify the terms
under which the lender may claim the credit, including the amount
of loss, if any, the lender must incur before the lender may claim
the credit; specify that the credit shall not exceed the amount of
the loss; and specify that the lender may claim the credit only
for a loss certified by a program administrator to the authority
under the procedures prescribed under division (B)(6) of section
150.05 of the Revised Code. The program administrator shall
provide to the authority an estimate of the amount of tax credits,
if any, that are likely, in the administrator's reasonable
judgment, to be claimed by a lender during the current and next
succeeding state fiscal years. The estimate shall be provided at
the same time each year that the administrator is required to
report the annual audit to the authority under section 150.05 of
the Revised Code.

(B) Tax credits may be authorized at any time after the
authority establishes the investment policy under section 150.03
of the Revised Code, but a tax credit so authorized may not be
claimed before July 1, 2007, or after June 30, 2026, except, with
respect to loans made from the proceeds of obligations issued
under section 4582.71 of the Revised Code, a tax credit may not be
claimed before July 1, 2012, or after June 30, 2036.

(C)(1) Upon receiving certification of a lender's loss from a
program administrator pursuant to the procedures in the investment
policy, the authority shall issue a tax credit certificate to the
lender, except as otherwise provided in division (D) of this
section.

(2) If the lender is a pass-through entity, as defined in
section 5733.04 of the Revised Code, then each equity investor in
the lender pass-through entity shall be entitled to claim one of
the tax credits allowed under division (A) of this section for
that equity investor's taxable year in which or with which ends
the taxable year of the lender pass-through entity in an amount
based on the equity investor's distributive or proportionate share
of the credit amount set forth in the certificate issued by the
authority. If all equity investors of the lender pass-through
entity are not eligible to claim a credit against the same tax set
forth in division (A) of this section, then each equity investor
may elect to claim a credit against the tax to which the equity
investor is subject to in an amount based on the equity investor's
distributive or proportionate share of the credit amount set forth
in the certificate issued by the authority.

(3) The certificate shall state the amount of the credit and
the calendar year under section 5707.031, 5725.19, 5727.241, or
5729.08, the tax year under section
5726.53 or 5733.49, or the
taxable year under section 5747.80 of the Revised Code for which
the credit may be claimed. The authority, in conjunction with the
tax commissioner, shall develop a system for issuing tax credit
certificates for the purpose of verifying that any credit claimed
is a credit issued under this section and is properly taken in the
year specified in the certificate and in compliance with division
(B) of this section.

(D) The authority shall not, in any fiscal year, issue tax
credit certificates under this section in a total amount exceeding
twenty million dollars. The authority shall not issue tax credit
certificates under this section in a total amount exceeding three
hundred eighty million dollars.

(E) Notwithstanding any other section of this chapter or any
provision of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or
5747. of the Revised Code, if provided by the terms of an
agreement entered into by the issuer and the authority under
division (E) of section 150.02 of the Revised Code, and subject to
the limitations of divisions (B) and (D) of this section, a
trustee shall have the right, for the benefit of the issuer, to
receive and claim the credits authorized under division (A) of
this section solely for the purpose provided for in section 150.04
of the Revised Code, and the trustee shall be entitled to file a
tax return, an amended tax return, or an estimated tax return at
such times as are permitted or required under the applicable
provisions of Chapter 5707., 5725., 5726., 5727., 5729., 5733., or
5747. of the Revised Code for the purpose of claiming credits
issued to the trustee. The trustee shall receive the proceeds of
such a tax credit for the benefit of the issuer, and shall apply
the proceeds solely to satisfy a loss or restore a reserve as
provided in section 150.04 of the Revised Code. Nothing in this
section shall require a trustee to file a tax return under any
chapter for any purpose other than claiming such credits if the
trustee is not otherwise required to make such a filing.

The general assembly may from time to time modify or repeal
any of the taxes against which the credits authorized under
division (A) of this section may be claimed, and may authorize
those credits to be claimed for the purposes provided for in
section 150.04 of the Revised Code with respect to any other tax
imposed by this state; provided, that if any obligations issued
under section 4582.71 of the Revised Code are then outstanding and
such modification or repeal would have the effect of impairing any
covenant made in or pursuant to an agreement under division (E) of
section 150.02 of the Revised Code regarding the maintenance or
restoration of reserves established and maintained with a trustee
consistent with division (B)(2) of section 150.04 of the Revised
Code and such agreement, the state shall provide other security to
the extent necessary to avoid or offset the impairment of such
covenant.

Sec. 150.10. (A) On the first day of January of the second
year after the date of entering into an agreement under section
150.05 of the Revised Code and of each ensuing year, the authority
shall file with the clerk of the house of representatives, the
clerk of the senate, and the chairpersons of the house and senate
standing committees predominantly concerned with economic
development a written report on the Ohio venture capital program.
The report shall include all the following:

(1) A description of the details of the investment policy
established or modified in accordance with sections 150.03 and
150.04 of the Revised Code;

(2) The authority's assessment of the program's achievement
of its purpose stated in section 150.01 of the Revised Code;

(3) The value of tax credit certificates issued by the
authority under section 150.07 of the Revised Code in each fiscal
year ending on or before the preceding thirtieth day of June;

(4) The amount of tax credits claimed pursuant to section
5707.031, 5725.19, 5726.53, 5727.241, 5729.08, 5733.49, or 5747.80
of the Revised Code, as to the respective taxes involved;

(5) The financial status of the Ohio venture capital fund;

(6) The names of venture capital funds in which money from
the program fund has been invested and the locations of their
principal offices, and the names of the enterprises in which each
of those venture capital funds has invested such money and the
locations of those enterprises' principal offices;

(7) Any recommendations for modifying the program to better
achieve the purpose stated in section 150.01 of the Revised Code.

(B) During each year that a report is issued under division
(A) of this section, the chairperson of the authority, or another
member of the authority designated by the chairperson as the
authority's representative, shall be required to appear in person
before the standing committees of the house and senate
predominantly concerned with economic development to give
testimony concerning the status of the Ohio venture capital
program.

Sec. 715.013. (A) Except as otherwise expressly authorized by
the Revised Code, no municipal corporation shall levy a tax that
is the same as or similar to a tax levied under Chapter 322.,
3734., 3769., 4123., 4141., 4301., 4303., 4305., 4307., 4309.,
5707., 5725., 5726., 5727., 5728., 5729., 5731., 5735., 5737.,
5739., 5741., 5743., or 5749. of the Revised Code.

(B) This section does not prohibit a municipal corporation
from levying a tax on any of the following:

(1) Amounts received for admission to any place;

(2) The income of an electric company or combined company, as
defined in section 5727.01 of the Revised Code;

(3) On and after January 1, 2004, the income of a telephone
company, as defined in section 5727.01 of the Revised Code.

Sec. 742.114. (A) As used in this section and in section
742.116 of the Revised Code:

(1) "Agent" means a dealer, as defined in section 1707.01 of
the Revised Code, who is licensed under sections 1707.01 to
1707.45 of the Revised Code or under comparable laws of another
state or of the United States.

(2) "Minority business enterprise" has the same meaning as in
section 122.71 of the Revised Code.

(3) "Ohio-qualified agent" means an agent designated as such
by the board of trustees of the fund.

(4) "Ohio-qualified investment manager" means an investment
manager designated as such by the board of trustees of the fund.

(5) "Principal place of business" means an office in which
the agent regularly provides securities or investment advisory
services and solicits, meets with, or otherwise communicates with
clients.

(B) The board of trustees of the fund shall, for the purposes
of this section, designate an agent as an Ohio-qualified agent if
the agent meets all of the following requirements:

(1) The agent is subject to taxation under Chapter 5725.,
5726., 5733., or 5747., or 5751. of the Revised Code;

(2) The agent is authorized to conduct business in this
state;

(3) The agent maintains a principal place of business in this
state and employs at least five residents of this state.

(C) The board shall adopt and implement a written policy to
establish criteria and procedures used to select agents to execute
securities transactions on behalf of the retirement system. The
policy shall address each of the following:

(1) Commissions charged by the agent, both in the aggregate
and on a per share basis;

(2) The execution speed and trade settlement capabilities of
the agent;

(3) The responsiveness, reliability, and integrity of the
agent;

(4) The nature and value of research provided by the agent;

(5) Any special capabilities of the agent.

(D)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified agents for the execution of domestic equity and
fixed-income trades on behalf of the retirement system, when an
Ohio-qualified agent offers quality, services, and safety
comparable to other agents otherwise available to the board and
meets the criteria established under division (C) of this section.

(2) The board shall review, at least annually, the
performance of the agents that execute securities transactions on
behalf of the board.

(3) The board shall determine whether an agent is an
Ohio-qualified agent, meets the criteria established by the board
pursuant to division (C) of this section, and offers quality,
services, and safety comparable to other agents otherwise
available to the board. The board's determination shall be final.

(E) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each agent designated as an Ohio-qualified
agent under this section;

(2) The name of each agent that executes securities
transactions on behalf of the board;

(3) The amount of equity and fixed-income trades that are
executed by Ohio-qualified agents, expressed as a percentage of
all equity and fixed-income trades that are executed by agents on
behalf of the board;

(4) The compensation paid to Ohio-qualified agents, expressed
as a percentage of total compensation paid to all agents that
execute securities transactions on behalf of the board;

(5) The amount of equity and fixed-income trades that are
executed by agents that are minority business enterprises,
expressed as a percentage of all equity and fixed-income trades
that are executed by agents on behalf of the board;

(6) Any other information requested by the Ohio retirement
study council regarding the board's use of agents.

Sec. 742.116. (A) The board of trustees of the pension fund
shall, for the purposes of this section, designate an investment
manager as an Ohio-qualified investment manager if the investment
manager meets all of the following requirements:

(1) The investment manager is subject to taxation under
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised
Code;

(2) The investment manager meets one of the following
requirements:

(a) Has its corporate headquarters or principal place of
business in this state;

(b) Employs at least five hundred individuals in this state;

(c) Has a principal place of business in this state and
employs at least 20 residents of this state.

(B)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified investment managers, when an Ohio-qualified
investment manager offers quality, services, and safety comparable
to other investment managers otherwise available to the board. The
policy shall also provide for the following:

(a) A process whereby the board can develop a list of
Ohio-qualified investment managers and their investment products;

(b) A process whereby the board can give public notice to
Ohio-qualified investment managers of the board's search for an
investment manager that includes the board's search criteria.

(2) The board shall determine whether an investment manager
is an Ohio-qualified investment manager and whether the investment
manager offers quality, services, and safety comparable to other
investment managers otherwise available to the board. The board's
determination shall be final.

(C) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each investment manager designated as an
Ohio-qualified investment manager under this section;

(2) The name of each investment manager with which the board
contracts;

(3) The amount of assets managed by Ohio-qualified investment
managers, expressed as a percentage of the total assets held by
the retirement system and as a percentage of assets managed by
investment managers with which the board has contracted;

(4) The compensation paid to Ohio-qualified investment
managers, expressed as a percentage of total compensation paid to
all investment managers with which the board has contracted;

(5) Any other information requested by the Ohio retirement
study council regarding the board's use of investment managers.

Sec. 3307.152. (A) As used in this section and in section
3307.154 of the Revised Code:

(1) "Agent" means a dealer, as defined in section 1707.01 of
the Revised Code, who is licensed under sections 1707.01 to
1707.45 of the Revised Code or under comparable laws of another
state or of the United States.

(2) "Minority business enterprise" has the same meaning as in
section 122.71 of the Revised Code.

(3) "Ohio-qualified agent" means an agent designated as such
by the state teachers retirement board.

(4) "Ohio-qualified investment manager" means an investment
manager designated as such by the state teachers retirement board.

(5) "Principal place of business" means an office in which
the agent regularly provides securities or investment advisory
services and solicits, meets with, or otherwise communicates with
clients.

(B) The state teachers retirement board shall, for the
purposes of this section, designate an agent as an Ohio-qualified
agent if the agent meets all of the following requirements:

(1) The agent is subject to taxation under Chapter 5725.,
5726., 5733., or 5747., or 5751. of the Revised Code.

(2) The agent is authorized to conduct business in this
state.

(3) The agent maintains a principal place of business in this
state and employs at least five residents of this state.

(C) The state teachers retirement board shall adopt and
implement a written policy to establish criteria and procedures
used to select agents to execute securities transactions on behalf
of the retirement system. The policy shall address each of the
following:

(a)(1) Commissions charged by the agent, both in the
aggregate and on a per share basis;

(b)(2) The execution speed and trade settlement capabilities
of the agent;

(c)(3) The responsiveness, reliability, and integrity of the
agent;

(d)(4) The nature and value of research provided by the
agent;

(e)(5) Any special capabilities of the agent.

(D)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified agents for the execution of domestic equity and
fixed income trades on behalf of the retirement system, when an
Ohio-qualified agent offers quality, services, and safety
comparable to other agents otherwise available to the board and
meets the criteria established under division (C) of this section.

(2) The board shall review, at least annually, the
performance of the agents that execute securities transactions on
behalf of the board.

(3) The board shall determine whether an agent is an
Ohio-qualified agent, meets the criteria established by the board
pursuant to division (C) of this section, and offers quality,
services, and safety comparable to other agents otherwise
available to the board. The board's determination shall be final.

(E) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each agent designated as an Ohio-qualified
agent under this section;

(2) The name of each agent that executes securities
transactions on behalf of the board;

(3) The amount of equity and fixed-income trades that are
executed by Ohio-qualified agents, expressed as a percentage of
all equity and fixed-income trades that are executed by agents on
behalf of the board;

(4) The compensation paid to Ohio-qualified agents, expressed
as a percentage of total compensation paid to all agents that
execute securities transactions on behalf of the board;

(5) The amount of equity and fixed-income trades that are
executed by agents that are minority business enterprises,
expressed as a percentage of all equity and fixed-income trades
that are executed by agents on behalf of the board;

(6) Any other information requested by the Ohio retirement
study council regarding the board's use of agents.

Sec. 3307.154. (A) The state teachers retirement board shall,
for the purposes of this section, designate an investment manager
as an Ohio-qualified investment manager if the investment manager
meets all of the following requirements:

(1) The investment manager is subject to taxation under
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised
Code.

(2) The investment manager meets one of the following
requirements:

(a) Has its corporate headquarters or principal place of
business in this state;

(b) Employs at least five hundred individuals in this state;

(c) Has a principal place of business in this state and
employs at least twenty residents of this state.

(B)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified investment managers, when an Ohio-qualified
investment manager offers quality, services, and safety comparable
to other investment managers otherwise available to the board. The
policy shall also provide for the following:

(a) A process whereby the board can develop a list of
Ohio-qualified investment managers and their investment products;

(b) A process whereby the board can give public notice to
Ohio-qualified investment managers of the board's search for an
investment manager that includes the board's search criteria.

(2) The board shall determine whether an investment manager
is an Ohio-qualified investment manager and whether the investment
manager offers quality, services, and safety comparable to other
investment managers otherwise available to the board. The board's
determination shall be final.

(C) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each investment manager designated as an
Ohio-qualified investment manager under this section;

(2) The name of each investment manager with which the board
contracts;

(3) The amount of assets managed by Ohio-qualified investment
managers, expressed as a percentage of the total assets held by
the retirement system and as a percentage of assets managed by
investment managers with which the board has contracted;

(4) The compensation paid to Ohio-qualified investment
managers, expressed as a percentage of total compensation paid to
all investment managers with which the board has contracted;

(5) Any other information requested by the Ohio retirement
study council regarding the board's use of investment managers.

Sec. 3309.157. (A) As used in this section and in section
3309.159 of the Revised Code:

(1) "Agent" means a dealer, as defined in section 1707.01 of
the Revised Code, who is licensed under sections 1707.01 to
1707.45 of the Revised Code or under comparable laws of another
state or of the United States.

(2) "Minority business enterprise" has the same meaning as in
section 122.71 of the Revised Code.

(3) "Ohio-qualified agent" means an agent designated as such
by the school employees retirement board.

(4) "Ohio-qualified investment manager" means an investment
manager designated as such by the school employees retirement
board.

(5) "Principal place of business" means an office in which
the agent regularly provides securities or investment advisory
services and solicits, meets with, or otherwise communicates with
clients.

(B) The school employees retirement board shall, for the
purposes of this section, designate an agent as an Ohio-qualified
agent if the agent meets all of the following requirements:

(1) The agent is subject to taxation under Chapter 5725.,
5726., 5733., or 5747., or 5751. of the Revised Code.

(2) The agent is authorized to conduct business in this
state.

(3) The agent maintains a principal place of business in this
state and employeesemploys at least five residents of this state.

(C) The school employees retirement board shall adopt and
implement a written policy to establish criteria and procedures
used to select agents to execute securities transactions on behalf
of the retirement system. The policy shall address each of the
following:

(a)(1) Commissions charged by the agent, both in the
aggregate and on a per share basis;

(b)(2) The execution speed and trade settlement capabilities
of the agent;

(c)(3) The responsiveness, reliability, and integrity of the
agent;

(d)(4) The nature and value of research provided by the
agent;

(e)(5) Any special capabilities of the agent.

(D)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified agents for the execution of domestic equity and
fixed income trades on behalf of the retirement system, when an
Ohio-qualified agent offers quality, services, and safety
comparable to other agents otherwise available to the board and
meets the criteria established under division (C) of this section.

(2) The board shall review, at least annually, the
performance of the agents that execute securities transactions on
behalf of the board.

(3) The board shall determine whether an agent is an
Ohio-qualified agent, meets the criteria established by the board
pursuant to division (C) of this section, and offers quality,
services, and safety comparable to other agents otherwise
available to the board. The board's determination shall be final.

(E) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each agent designated as an Ohio-qualified
agent under this section;

(2) The name of each agent that executes securities
transactions on behalf of the board;

(3) The amount of equity and fixed-income trades that are
executed by Ohio-qualified agents, expressed as a percentage of
all equity and fixed-income trades that are executed by agents on
behalf of the board;

(4) The compensation paid to Ohio-qualified agents, expressed
as a percentage of total compensation paid to all agents that
execute securities transactions on behalf of the board;

(5) The amount of equity and fixed-income trades that are
executed by agents that are minority business enterprises,
expressed as a percentage of all equity and fixed-income trades
that are executed by agents on behalf of the board;

(6) Any other information requested by the Ohio retirement
study council regarding the board's use of agents.

Sec. 3309.159. (A) The school employees retirement board
shall, for the purposes of this section, designate an investment
manager as an Ohio-qualified investment manager if the investment
manager meets all of the following requirements:

(1) The investment manager is subject to taxation under
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised
Code.

(2) The investment manager meets one of the following
requirements:

(a) Has its corporate headquarters or principal place of
business in this state;

(b) Employs at least five hundred individuals in this state;

(c) Has a principal place of business in this state and
employs at least 20twenty residents of this state.

(B)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified investment managers, when an Ohio-qualified
investment manager offers quality, services, and safety comparable
to other investment managers otherwise available to the board. The
policy shall also provide for the following:

(a) A process whereby the board can develop a list of
Ohio-qualified investment managers and their investment products;

(b) A process whereby the board can give public notice to
Ohio-qualified investment managers of the board's search for an
investment manager that includes the board's search criteria.

(2) The board shall determine whether an investment manager
is an Ohio-qualified investment manager and whether the investment
manager offers quality, services, and safety comparable to other
investment managers otherwise available to the board. The board's
determination shall be final.

(C) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each investment manager designated as an
Ohio-qualified investment manager under this section;

(2) The name of each investment manager with which the board
contracts;

(3) The amount of assets managed by Ohio-qualified investment
managers, expressed as a percentage of the total assets held by
the retirement system and as a percentage of assets managed by
investment managers with which the board has contracted;

(4) The compensation paid to Ohio-qualified investment
managers, expressed as a percentage of total compensation paid to
all investment managers with which the board has contracted;

(5) Any other information requested by the Ohio retirement
study council regarding the board's use of investment managers.

Sec. 5505.068. (A) As used in this section and in section
5505.0610 of the Revised Code:

(1) "Agent" means a dealer, as defined in section 1707.01 of
the Revised Code, who is licensed under sections 1707.01 to
1707.45 of the Revised Code or under comparable laws of another
state or of the United States.

(2) "Minority business enterprise" has the same meaning as in
section 122.71 of the Revised Code.

(3) "Ohio-qualified agent" means an agent designated as such
by the state highway patrol retirement board.

(4) "Ohio-qualified investment manager" means an investment
manager designated as such by the state highway patrol retirement
board.

(5) "Principal place of business" means an office in which
the agent regularly provides securities or investment advisory
services and solicits, meets with, or otherwise communicates with
clients.

(B) The state highway patrol retirement board shall, for the
purposes of this section, designate an agent as an Ohio-qualified
agent if the agent meets all of the following requirements:

(1) The agent is subject to taxation under Chapter 5725.,
5726., 5733., or 5747., or 5751. of the Revised Code.

(2) The agent is authorized to conduct business in this
state;

(3) The agent maintains a principal place of business in this
state and employs at least five residents of this state.

(C) The state highway patrol retirement board shall adopt and
implement a written policy to establish criteria and procedures
used to select agents to execute securities transactions on behalf
of the retirement system. The policy shall address each of the
following:

(1) Commissions charged by the agent, both in the aggregate
and on a per share basis;

(2) The execution speed and trade settlement capabilities of
the agent;

(3) The responsiveness, reliability, and integrity of the
agent;

(4) The nature and value of research provided by the agent;

(5) Any special capabilities of the agent.

(D)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified agents for the execution of domestic equity and
fixed income trades on behalf of the retirement system, when an
Ohio-qualified agent offers quality, services, and safety
comparable to other agents otherwise available to the board and
meets the criteria established under division (C) of this section.

(2) The board shall review, at least annually, the
performance of the agents that execute securities transactions on
behalf of the board.

(3) The board shall determine whether an agent is an
Ohio-qualified agent, meets the criteria established by the board
pursuant to division (C) of this section, and offers quality,
services, and safety comparable to other agents otherwise
available to the board. The board's determination shall be final.

(E) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each agent designated as an Ohio-qualified
agent under this section;

(2) The name of each agent that executes securities
transactions on behalf of the board;

(3) The amount of equity and fixed-income trades that are
executed by Ohio-qualified agents, expressed as a percentage of
all equity and fixed-income trades that are executed by agents on
behalf of the board;

(4) The compensation paid to Ohio-qualified agents, expressed
as a percentage of total compensation paid to all agents that
execute securities transactions on behalf of the board;

(5) The amount of equity and fixed-income trades that are
executed by agents that are minority business enterprises,
expressed as a percentage of all equity and fixed-income trades
that are executed by agents on behalf of the board;

(6) Any other information requested by the Ohio retirement
study council regarding the board's use of agents.

Sec. 5505.0610. (A) The state highway patrol retirement board
shall, for the purposes of this section, designate an investment
manager as an Ohio-qualified investment manager if the investment
manager meets all of the following requirements:

(1) The investment manager is subject to taxation under
Chapter 5725., 5726., 5733., or 5747., or 5751. of the Revised
Code.

(2) The investment manager meets one of the following
requirements:

(a) Has its corporate headquarters or principal place of
business in this state;

(b) Employs at least five hundred individuals in this state;

(c) Has a principal place of business in this state and
employs at least 20twenty residents of this state.

(B)(1) The board shall, at least annually, establish a policy
with the goal to increase utilization by the board of
Ohio-qualified investment managers, when an Ohio-qualified
investment manager offers quality, services, and safety comparable
to other investment managers otherwise available to the board. The
policy shall also provide for the following:

(a) A process whereby the board can develop a list of
Ohio-qualified investment managers and their investment products;

(b) A process whereby the board can give public notice to
Ohio-qualified investment managers of the board's search for an
investment manager that includes the board's search criteria.

(2) The board shall determine whether an investment manager
is an Ohio-qualified investment manager and whether the investment
manager offers quality, services, and safety comparable to other
investment managers otherwise available to the board. The board's
determination shall be final.

(C) The board shall, at least annually, submit to the Ohio
retirement study council a report containing the following
information:

(1) The name of each investment manager designated as an
Ohio-qualified investment manager under this section;

(2) The name of each investment manager with which the board
contracts;

(3) The amount of assets managed by Ohio-qualified investment
managers, expressed as a percentage of the total assets held by
the retirement system and as a percentage of assets managed by
investment managers with which the board has contracted;

(4) The compensation paid to Ohio-qualified investment
managers, expressed as a percentage of total compensation paid to
all investment managers with which the board has contracted;

(5) Any other information requested by the Ohio retirement
study council regarding the board's use of investment managers.

Sec. 5701.12. (A) The effective date to which this section
refers is the effective date of this section as enacted by H.B.
510 of the 129th general assembly.

(B) Any reference in Title LVII to "consolidated reports of
condition and income" or "call report" means the consolidated
reports of condition and income as those reports existed on the
effective date.

(C) Any reference in Title LVII to "FR Y-9" or "Y-9" means
the FR Y-9 financial statements as those financial statements
existed on the effective date.

(D) This section does not apply to any reference in Title
LVII of the Revised Code to "consolidated reports of condition and
income," "call report," "FR Y-9," or "Y-9" as of a date certain
specifying the day, month, and year.

Sec. 5703.052. (A) There is hereby created in the state
treasury the tax refund fund, from which refunds shall be paid for
taxes illegally or erroneously assessed or collected, or for any
other reason overpaid, that are levied by Chapter 4301., 4305.,
5726., 5728., 5729., 5733., 5735., 5739., 5741., 5743., 5747.,
5748., 5749., 5751., or 5753. and sections 3737.71, 3905.35,
3905.36, 4303.33, 5707.03, 5725.18, 5727.28, 5727.38, 5727.81, and
5727.811 of the Revised Code. Refunds for fees illegally or
erroneously assessed or collected, or for any other reason
overpaid, that are levied by sections 3734.90 to 3734.9014 of the
Revised Code also shall be paid from the fund. Refunds for amounts
illegally or erroneously assessed or collected by the tax
commissioner, or for any other reason overpaid, that are due under
section 1509.50 of the Revised Code shall be paid from the fund.
However, refunds for taxes levied under section 5739.101 of the
Revised Code shall not be paid from the tax refund fund, but shall
be paid as provided in section 5739.104 of the Revised Code.

(B)(1) Upon certification by the tax commissioner to the
treasurer of state of a tax refund, a fee refund, or an other
amount refunded, or by the superintendent of insurance of a
domestic or foreign insurance tax refund, the treasurer of state
shall place the amount certified to the credit of the fund. The
certified amount transferred shall be derived from current
receipts of the same tax, fee, or other amount from which the
refund arose. If current receipts from the tax, fee, or other
amount from which the refund arose are inadequate to make the
transfer of the amount so certified, the treasurer of state shall
transfer such certified amount from current receipts of the sales
tax levied by section 5739.02 of the Revised Code.

(2) When the treasurer of state provides for the payment of a
refund of a tax, fee, or other amount from the current receipts of
the sales tax, and the refund is for a tax, fee, or other amount
that is not levied by the state, the tax commissioner shall
recover the amount of that refund from the next distribution of
that tax, fee, or other amount that otherwise would be made to the
taxing jurisdiction. If the amount to be recovered would exceed
twenty-five per cent of the next distribution of that tax, fee, or
other amount, the commissioner may spread the recovery over more
than one future distribution, taking into account the amount to be
recovered and the amount of the anticipated future distributions.
In no event may the commissioner spread the recovery over a period
to exceed twenty-four months.

Sec. 5703.053. As used in this section, "postal service"
means the United States postal service.

An application to the tax commissioner for a tax refund under
section 4307.05, 4307.07, 5726.30, 5727.28, 5727.91, 5728.061,
5735.122, 5735.13, 5735.14, 5735.141, 5735.142, 5739.07, 5741.10,
5743.05, 5743.53, 5745.11, 5749.08, or 5751.08 of the Revised Code
or division (B) of section 5703.05 of the Revised Code, or a fee
refunded under section 3734.905 of the Revised Code, that is
received after the last day for filing under such section shall be
considered to have been filed in a timely manner if:

(A) The application is delivered by the postal service and
the earliest postal service postmark on the cover in which the
application is enclosed is not later than the last day for filing
the application;

(B) The application is delivered by the postal service, the
only postmark on the cover in which the application is enclosed
was affixed by a private postal meter, the date of that postmark
is not later than the last day for filing the application, and the
application is received within seven days of such last day; or

(C) The application is delivered by the postal service, no
postmark date was affixed to the cover in which the application is
enclosed or the date of the postmark so affixed is not legible,
and the application is received within seven days of the last day
for making the application.

Sec. 5703.70. (A) On the filing of an application for refund
under section 3734.905, 4307.05, 4307.07, 5726.30, 5727.28,
5727.91, 5728.061, 5733.12, 5735.122, 5735.13, 5735.14, 5735.141,
5735.142, 5735.18, 5739.07, 5739.071, 5739.104, 5741.10, 5743.05,
5743.53, 5749.08, 5751.08, or 5753.06 of the Revised Code, or an
application for compensation under section 5739.061 of the Revised
Code, if the tax commissioner determines that the amount of the
refund or compensation to which the applicant is entitled is less
than the amount claimed in the application, the commissioner shall
give the applicant written notice by ordinary mail of the amount.
The notice shall be sent to the address shown on the application
unless the applicant notifies the commissioner of a different
address. The applicant shall have sixty days from the date the
commissioner mails the notice to provide additional information to
the commissioner or request a hearing, or both.

(B) If the applicant neither requests a hearing nor provides
additional information to the tax commissioner within the time
prescribed by division (A) of this section, the commissioner shall
take no further action, and the refund or compensation amount
denied becomes final.

(C)(1) If the applicant requests a hearing within the time
prescribed by division (A) of this section, the tax commissioner
shall assign a time and place for the hearing and notify the
applicant of such time and place, but the commissioner may
continue the hearing from time to time as necessary. After the
hearing, the commissioner may make such adjustments to the refund
or compensation as the commissioner finds proper, and shall issue
a final determination thereon.

(2) If the applicant does not request a hearing, but provides
additional information, within the time prescribed by division (A)
of this section, the commissioner shall review the information,
make such adjustments to the refund or compensation as the
commissioner finds proper, and issue a final determination
thereon.

(3) The commissioner shall serve a copy of the final
determination made under division (C)(1) or (2) of this section on
the applicant in the manner provided in section 5703.37 of the
Revised Code, and the decision is final, subject to appeal under
section 5717.02 of the Revised Code.

(D) The tax commissioner shall certify to the director of
budget and management and treasurer of state for payment from the
tax refund fund created by section 5703.052 of the Revised Code,
the amount of the refund to be refunded under division (B) or (C)
of this section. The commissioner also shall certify to the
director and treasurer of state for payment from the general
revenue fund the amount of compensation to be paid under division
(B) or (C) of this section.

Sec. 5707.03. Annual taxes are hereby levied on the kinds of
intangible property, enumerated in this section, on the intangible
property tax list in the office of the treasurer of state at the
following rates:

(A) On investments, five per cent of income yield or of
income as provided by section 5711.10 of the Revised Code for the
1983, 1984, and 1985 return years and no tax for subsequent return
years;

(B) On unproductive investments, two mills on the dollar for
the 1983, 1984, and 1985 return years and no tax for subsequent
return years;

(C) On deposits, one and three-eighths mills on the dollar
for the 1982 and 1983 return years and no tax for subsequent
return years;

(D) On shares of, and capital employed by, dealers in
intangibles, eight mills on the dollar for return years prior to
2014 and no tax under this section for subsequent return years;

(E) On money, credits, and all other taxable intangibles,
three mills on the dollar for the 1983, 1984, and 1985 return
years and no tax for subsequent return years.

The object and distribution of such taxes shall be as
provided in section 5725.24 of the Revised Code.

Sec. 5709.76. (A) All of the following are exempt from taxes
levied by the state and its subdivisions:

(1) Public obligations;

(2) Interest or interest equivalent on public obligations and
on purchase obligations;

(3) The transfer, and any profit made on the sale, exchange,
or other disposition, of public obligations.

(B) The exemptions granted by division (A) of this section
apply to public obligations and purchase obligations issued,
incurred, or entered into before, on, or after the effective date
of this sectionMarch 29, 1988, but only for taxable years ending
on or after the later of July 1, 1988, or the effective date of
this sectionMarch 29, 1988.

(C) This section supplements, and does not restrict, limit,
or impair, any exemption from taxation otherwise provided for in
the Ohio Constitution, the Revised Code, or other laws.

(D) As used in this section:

(1) "Fractionalized interests in purchase obligations" means
participations, shares, or other instruments or agreements,
separate from the purchase obligations themselves, evidencing
ownership of interests in purchase obligations or of rights to
receive payments of, or on account of, principal or interest or
their equivalents payable by or on behalf of the state or a
subdivision pursuant to purchase obligations, and does not include
interests or shares in qualified investment trusts.

(2) "Interest or interest equivalent" means those payments or
portions of payments, however denominated, that constitute or
represent consideration for forbearing the collection of money, or
for deferring the receipt of payment of money to a future time, as
determined for federal income tax purposes, and includes those
portions of a qualified investment trust's distributions to its
shareholders or beneficial owners, whether distributed or deemed
distributed in cash or in trust shares or interests, that are
attributable to the trust's receipt of interest or interest
equivalent.

(3) "Internal Revenue Code" has the same meaning as in
division (H) of section 5747.01 of the Revised Code.

(4) "Qualified investment trust" or "trust" means a unit
investment trust, grantor trust, or regulated investment company,
if at all times at least fifty per cent of the value of the total
assets of the trust or company consists of public securities or
purchase obligations, or similar obligations of other states or
their subdivisions.

(5) "Public obligations" means public securities,
fractionalized interests in purchase obligations, and any
obligation or evidence of obligation to pay interest or interest
equivalent on public securities or on fractionalized interests in
purchase obligations, and does not include purchase obligations.

(6) "Public securities" means bonds, notes, certificates of
indebtedness, commercial paper, and other instruments in writing
issued by the state or a subdivision, or by any nonprofit
corporation authorized to issue public securities for or on behalf
of the state or a subdivision, to evidence the obligation of the
state, subdivision, or nonprofit corporation to repay money
borrowed by, or to pay at any future time other money obligations
of, the state, subdivision, or nonprofit corporation, and does not
include purchase obligations. Public securities may be in the form
of either certificated securities or uncertificated securities, as
those terms are defined in section 1308.01 of the Revised Code.

(7) "Purchase obligations" means interest-bearing obligations
of the state or a subdivision to make payments under installment
sale, lease, lease purchase, or similar types of agreements.

(8) "Regulated investment company" means a regulated
investment company as defined in section 851 of the Internal
Revenue Code.

(9) "State" means the state, state officers, and state
agencies, including commissions, institutions, boards, agencies,
authorities, or other instrumentalities.

(10) "Subdivision" means any local taxing authority,
political or governmental subdivision, body corporate and politic,
or other local public or governmental entity in the state, any
combination or consortium of two or more of those subdivisions,
and any public division, district, commission, authority,
department, board, officer, or institution of any one or more of
those subdivisions.

(11) "Taxes" means any direct or indirect taxes, including
income, ad valorem, transfer, and excise taxes, and including the
tax on the net income measure of the issued and outstanding shares
of a corporation under Chapter 5733. of the Revised Code. "Taxes"
does not mean any of the following:

(a) The tax on the net worth measure of the issued and
outstanding shares of corporations and financial institutions
under Chapter 5733. of the Revised Code;

(b) The tax on the value of the gross estate under Chapter
5731. of the Revised Code;

(c) The tax on the value of the capital and surplus of a
domestic insurance company under Chapter 5725. of the Revised
Code;

(d) The tax on the shares of and capital employed by dealers
in intangibles under Chapter 5725. and section 5707.03 of the
Revised Code;

(e) The tax levied on the basis of the total equity capital
of financial institutions under Chapter 5726. of the Revised Code.

Sec. 5711.22. (A) Deposits not taxed at the source shall be
listed and assessed at their amount in dollars on the day they are
required to be listed. Moneys shall be listed and assessed at the
amount thereof in dollars on hand on the day that they are
required to be listed. In listing investments, the amount of the
income yield of each for the calendar year next preceding the date
of listing shall, except as otherwise provided in this chapter, be
stated in dollars and cents and the assessment thereof shall be at
the amount of such income yield; but any property defined as
investments in either division (A) or (B) of section 5701.06 of
the Revised Code that has not been outstanding for the full
calendar year next preceding the date of listing, except shares of
stock of like kind as other shares of the same corporation
outstanding for the full calendar year next preceding the date of
listing, or which has yielded no income during such calendar year
shall be listed and assessed as unproductive investments, at their
true value in money on the day that such investments are required
to be listed.

Credits and other taxable intangibles shall be listed and
assessed at their true value in money on the day as of which the
same are required to be listed.

Shares of stock of a bank holding company, as defined in
Title 12 U.S.C.A., section 1841, that are required to be listed
for taxation under this division and upon which dividends were
paid during the year of their issuance, which dividends are
subject to taxation under the provisions of Chapter 5747. of the
Revised Code, shall be exempt from the intangibles tax for the
year immediately succeeding their issuance. If such shares bear
dividends the first calendar year after their issuance, which
dividends are subject to taxation under the provisions of Chapter
5747. of the Revised Code, it shall be deemed that the
nondelinquent intangible property tax pursuant to division (A) of
section 5707.04 of the Revised Code was paid on those dividends
paid that first calendar year after the issuance of the shares.

(B) For tax years before tax year 2009, boilers, machinery,
equipment, and personal property the true value of which is
determined under division (B) of section 5711.21 of the Revised
Code shall be listed and assessed at an amount equal to the sum of
the products determined under divisions (B)(1), (2), and (3) of
this section:

(1) Multiply the portion of the true value determined under
division (B)(1) of section 5711.21 of the Revised Code by the
assessment rate for the tax year in division (G) of this section;

(2) Multiply the portion of the true value determined under
division (B)(2) of section 5711.21 of the Revised Code by the
assessment rate in section 5727.111 of the Revised Code that is
applicable to the production equipment of an electric company;

(3) Multiply the portion of the true value determined under
division (B)(3) of section 5711.21 of the Revised Code by the
assessment rate in section 5727.111 of the Revised Code that is
applicable to the property of an electric company that is not
production equipment.

(C) For tax years before tax year 2009, personal property
leased to a public utility or interexchange telecommunications
company as defined in section 5727.01 of the Revised Code and used
directly in the rendition of a public utility service as defined
in division (P) of section 5739.01 of the Revised Code shall be
listed and assessed at the same percentage of true value in money
that such property is required to be assessed by section 5727.111
of the Revised Code if owned by the public utility or
interexchange telecommunications company.

(D)(1) Merchandise or an agricultural product shipped from
outside this state and held in this state in a warehouse or a
place of storage without further manufacturing or processing and
for storage only and for shipment outside this state, but that
does not qualify as "not used in business in this state" under
division (B)(1) or (2) of section 5701.08 of the Revised Code, is
nevertheless not used in business in this state for property tax
purposes.

(2) Merchandise or an agricultural product owned by a
qualified out-of-state person shipped from outside this state and
held in this state in a public warehouse without further
manufacturing or processing and for temporary storage only and for
shipment inside this state, but that does not qualify as "not used
in business in this state" under division (B)(1) or (2) of section
5701.08 of the Revised Code, is nevertheless not used in business
in this state for property tax purposes.

(3) As used in division (D)(2) of this section:

(a) "Qualified out-of-state person" means a person that does
not own, lease, or use property, other than merchandise or an
agricultural product described in this division, in this state,
and does not have employees, agents, or representatives in this
state;

(b) "Public warehouse" means a warehouse in this state that
is not subject to the control of or under the supervision of the
owner of the merchandise or agricultural product stored in it, or
staffed by the owner's employees, and from which the property is
to be shipped inside this state.

(E) Personal property valued pursuant to section 5711.15 of
the Revised Code and personal property required to be listed on
the average basis by division (B) of section 5711.16 of the
Revised Code, except property described in division (D) of this
section, business fixtures, and furniture not held for sale in the
course of business, shall be listed and assessed at twenty-three
per cent of its true value in money for tax year 2005 and at the
percentage of such true value specified in division (G) of this
section for tax year 2006 and each tax year thereafter.

(F) All manufacturing equipment as defined in section 5711.16
of the Revised Code shall be listed and assessed at the following
percentage of its true value in money:

(1) For all such property not previously used in business in
this state by the owner thereof, or by related member or
predecessor of the owner, other than as inventory, before January
1, 2005, zero per cent of true value;

(2) For all other such property, at the percentage of true
value specified in division (G) of this section for tax year 2005
and each tax year thereafter.

(G) Unless otherwise provided by law, all other personal
property used in business that has not been legally regarded as an
improvement on land and considered in arriving at the value of the
real property assessed for taxation shall be listed and assessed
at the following percentages of true value in money:

(1) For tax year 2005, twenty-five per cent of true value;

(2) For tax year 2006, eighteen and three-fourths per cent of
true value;

(3) For tax year 2007, twelve and one-half per cent of true
value;

(4) For tax year 2008, six and one-fourth per cent of true
value;

(5) For tax year 2009 and each tax year thereafter, zero per
cent of true value.

(H)(1) For tax year 2007 and thereafter, all personal
property used by a telephone company, telegraph company, or
interexchange telecommunications company shall be listed as
provided in this chapter and assessed at the following percentages
of true value in money:

(a) For tax year 2007, twenty per cent of true value;

(b) For tax year 2008, fifteen per cent of true value;

(c) For tax year 2009, ten per cent of true value;

(d) For tax year 2010, five per cent of true value;

(e) For tax year 2011 and each tax year thereafter, zero per
cent of true value.

(2) The property owned by a telephone, telegraph, or
telecommunications company shall be apportioned to each
appropriate taxing district as provided in section 5727.15 of the
Revised Code.

(I) During and after the tax year in which the assessment
rate equals zero per cent, the property described in division (E),
(F), (G), or (H) of this section shall not be listed for taxation.

(J) Divisions (E), (F), (G), and (H) of this section apply to
the property of a person described in divisions (E)(3) to (10),
(4), and (5) of section 5751.01 of the Revised Code. Division (J)
of this section does not prevent the application of the exemption
of property from taxation under section 5725.25 or 5725.26 of the
Revised Code.

Sec. 5725.02. TheFor report years prior to 2014, the
cashier or other principal accounting officer of each bank, the
secretary or other principal accounting officer of each other
incorporated financial institution, and the manager or owner of
each unincorporated financial institution shall return to the
department of taxation between the first and second Mondays of
March, annually, a report exhibiting in detail, and under
appropriate heads, the resources and liabilities of such
institution at the close of business on the thirty-first day of
December next preceding.

The report of each financial institution shall also show the
aggregate balances of the taxable deposits of its depositors in
each county in which the institution maintained an office for the
receipt of deposits, at the end of business on the day fixed by
the tax commissioner pursuant to section 5725.05 of the Revised
Code. The report shall show also the names and addresses of all
depositors whose deposits were wholly withdrawn from such
institution between the day so fixed and the date on which notice
of the fixing was received by such institution, or if no such
notice was received, then between the day fixed and the first day
of January next following, and the amount of taxable deposits of
each such depositerdepositor on the day fixed.

Sec. 5725.14. (A) As used in this section and section 5725.15
of the Revised Code:

(1) "Billing address" of a customer means one of the
following:

(a) The customer's address as set forth in any notice,
statement, bill, or similar acknowledgment shall be presumed to be
the address where the customer is located with respect to the
transaction for which the dealer issued the notice, statement,
bill, or acknowledgment.

(b) If the dealer issues any notice, statement, bill, or
similar acknowledgment electronically to an address other than a
street address or post office box address or if the dealer does
not issue such a notice, statement, bill, or acknowledgment, the
customer's street address as set forth in the records of the
dealer at the time of the transaction shall be presumed to be the
address where the customer is located.

(2) "Commissions" includes but is not limited to brokerage
commissions, asset management fees, and similar fees charged in
the regular course of business to a customer for the maintenance
and management of the customer's account.

(3) "Gross receipts" means one of the following:

(a) In the case of a dealer in intangibles principally
engaged in the business of lending money or discounting loans, the
aggregate amount of loans effected or discounted;

(b) In the case of a dealer in intangibles principally
engaged in the business of selling or buying stocks, bonds, or
other similar securities either on the dealer's own account or as
agent for another, the aggregate amount of all commissions
charged.

(B) Each dealer in intangibles shall return to the tax
commissioner between the first and second Mondays of March,
annually for return years prior to 2014, a report exhibiting in
detail, and under appropriate heads, the dealer's resources and
liabilities at the close of business on the thirty-first day of
December next preceding. In the case of an unincorporated dealer
in intangibles, such report shall also exhibit the amount or value
as of the date of conversion of all property within the year
preceding the date of listing, and on or after the first day of
November converted into bonds or other securities not taxed to the
extent such nontaxable bonds or securities may be shown in the
dealer's resources on such date, without deduction for
indebtedness created in the purchase of such nontaxable bonds or
securities.

If a dealer in intangibles maintains separate business
offices, whether within this state only or within and without this
state, the report shall also show the gross receipts from business
done at each such office during the year ending on the
thirty-first day of December next preceding.

For the purposes of this section and section 5725.15 of the
Revised Code, business is considered done at an office when it
originates at such office, but the receipts from business
originating at one office and consummated at another office shall
be divided equitably between such offices.

(C) For the purposes of this section and section 5725.15 of
the Revised Code, in the case of a dealer in intangibles
principally engaged in the business of selling or buying stocks,
bonds, or other similar securities either on the dealer's own
account or as agent for another, the dealer's capital, surplus,
and undivided profits employed in this state shall bear the same
ratio to the dealer's total capital, surplus, and undivided
profits employed everywhere as the amount described in division
(C)(1) of this section bears to the amount described in division
(C)(2) of this section:

(1) The sum of the commissions earned during the year covered
by the report from transactions with respect to brokerage accounts
owned by customers having billing addresses in this state;

(2) The sum of the commissions earned during that year from
transactions with respect to brokerage accounts owned by all of
the dealer's customers.

(D) An incorporated dealer in intangibles which owns or
controls fifty-one per cent or more of the common stock of another
incorporated dealer in intangibles may, under uniform regulations
prescribed by the tax commissioner, make a consolidated return for
the purpose of sections 5725.01 to 5725.26, inclusive, of the
Revised Code. In such case the parent corporation making such
return is not required to include in its resources any of the
stocks, securities, or other obligations of its subsidiary
dealers, nor permitted to include in its liabilities any of its
own securities or other obligations belonging to its subsidiaries.

Sec. 5725.16. On or before the first Monday of May, annually
for return years prior to 2014, the tax commissioner shall certify
to the treasurer of state the assessment of the shares or property
representing capital, or apportionment of either, of each dealer
in intangibles doing business in the state, showing separately the
amount representing capital employed in each county.

The treasurer of state shall place the amounts certified on
the intangible property tax list in histhe treasurer of state's
office in the names of the dealers represented by those
certificates.

Any certificate of abatement issued pursuant to section
5703.05 of the Revised Code for the overpayment of the tax on
shares or property representing capital of a dealer in intangibles
may be tendered by the payee or transferee thereof to the
treasurer of state as payment for any taxes allocable to the
county in which the claim for overpayment arose.

Sec. 5725.26. The real estate of a financial institution or
dealer in intangibles shall be taxed in the place where it is
located, the same as the real estate of persons is taxed, but the
taxes provided for in Chapters 5725. and, 5726., 5733., and 5751.
of the Revised Code, shall be in lieu of all other taxes on the
other property and assets of such institution or dealer, except
personal property taxable under Chapter 5711. of the Revised Code
and leased, or held for the purpose of leasing, to others if the
owner or lessor of the property acquired it for the sole purpose
of leasing it to others.

For reports required to be filed under section 5725.14 of the
Revised Code in 2003 and thereafter, nothing in this section shall
be construed to exempt the property of any dealer in intangibles
under section 5725.13 of the Revised Code from the tax imposed
under section 5707.03 of the Revised Code.

Sec. 5725.33. (A) Except as otherwise provided in this
section, terms used in this section have the same meaning as
section 45D of the Internal Revenue Code, any related proposed,
temporary or final regulations promulgated under the Internal
Revenue Code, any rules or guidance of the internal revenue
service or the United States department of the treasury, and any
related rules or guidance issued by the community development
financial institutions fund of the United States department of the
treasury, as such law, regulations, rules, and guidance exist on
the effective date of the enactment of this section by H.B. 1 of
the 128th general assemblyOctober 16, 2009.

As used in this section:

(1) "Adjusted purchase price" means the amount paid for
qualified equity investments multiplied by the qualified
low-income community investments made by the issuer in projects
located in this state as a percentage of the total amount of
qualified low-income community investments made by the issuer in
projects located in all states on the credit allowance date during
the applicable tax year, subject to divisions (B)(1) and (2) of
this section.

(2) "Applicable percentage" means zero per cent for each of
the first two credit allowance dates, seven per cent for the third
credit allowance date, and eight per cent for the four following
credit allowance dates.

(3) "Credit allowance date" means the date, on or after
January 1, 2010, a qualified equity investment is made and each of
the six anniversary dates thereafter. For qualified equity
investments made after the effective date of this sectionOctober
16, 2009, but before January 1, 2010, the initial credit allowance
date is January 1, 2010, and each of the six anniversary dates
thereafter is on the first day of January of each year.

(4) "Qualified active low-income community business" excludes
any business that derives or projects to derive fifteen per cent
or more of annual revenue from the rental or sale of real
property, except any business that is a special purpose entity
principally owned by a principal user of that property formed
solely for the purpose of renting, either directly or indirectly,
or selling real property back to such principal user if such
principal user does not derive fifteen per cent or more of its
gross annual revenue from the rental or sale of real property.

(5) "Qualified community development entity" includes only
entities:

(a) That have entered into an allocation agreement with the
community development financial institutions fund of the United
States department of the treasury with respect to credits
authorized by section 45D of the Internal Revenue Code;

(b) Whose service area includes any portion of this state;
and

(c) That will designate an equity investment in such entities
as a qualified equity investment for purposes of both section 45D
of the Internal Revenue Code and this section.

(6) "Qualified equity investment" is limited to an equity
investment in a qualified community development entity that:

(a) Is acquired after the effective date of the enactment of
this sectionOctober 16, 2009, at its original issuance solely in
exchange for cash;

(b) Has at least eighty-five per cent of its cash purchase
price used by the qualified community development entity to make
qualified low-income community investments, provided that in the
seventh year after a qualified equity investment is made, only
seventy-five per cent of such cash purchase price must be used by
the qualified community development entity to make qualified
low-income community investments; and

(c) Is designated by the issuer as a qualified equity
investment.

"Qualified equity investment" includes any equity investment
that would, but for division (A)(6)(a) of this section, be a
qualified equity investment in the hands of the taxpayer if such
investment was a qualified equity investment in the hands of a
prior holder.

(B) There is hereby allowed a nonrefundable credit against
the tax imposed by section 5725.18 of the Revised Code for an
insurance company holding a qualified equity investment on the
credit allowance date occurring in the calendar year for which the
tax is due. The credit shall equal the applicable percentage of
the adjusted purchase price of qualified low-income community
investments, subject to divisions (B)(1) and (2) of this section:

(1) For the purpose of calculating the amount of qualified
low-income community investments held by a qualified community
development entity, an investment shall be considered held by a
qualified community development entity even if the investment has
been sold or repaid, provided that, at any time before the seventh
anniversary of the issuance of the qualified equity investment,
the qualified community development entity reinvests an amount
equal to the capital returned to or received or recovered by the
qualified community development entity from the original
investment, exclusive of any profits realized and costs incurred
in the sale or repayment, in another qualified low-income
community investment within twelve months of the receipt of such
capital. If the qualified low-income community investment is sold
or repaid after the sixth anniversary of the issuance of the
qualified equity investment, the qualified low-income community
investment shall be considered held by the qualfiedqualified
community development entity through the seventh anniversary of
the qualified equity investment's issuance.

(2) The qualified low-income community investment made in
this state shall equal the sum of the qualified low-income
community investments in each qualified active low-income
community business in this state, not to exceed two million five
hundred sixty-four thousand dollars, in which the qualified
community development entity invests, including such investments
in any such businesses in this state related to that qualified
active low-income community business through majority ownership or
control.

The credit shall be claimed in the order prescribed by
section 5725.98 of the Revised Code. If the amount of the credit
exceeds the amount of tax otherwise due after deducting all other
credits in that order, the excess may be carried forward and
applied to the tax due for not more than four ensuing years.

By claiming a tax credit under this section, an insurance
company waives its rights under section 5725.222 of the Revised
Code with respect to the time limitation for the assessment of
taxes as it relates to credits claimed that later become subject
to recapture under division (E) of this section.

(C) The amount of qualified equity investments on the basis
of which credits may be claimed under this section and sections
5726.54, 5729.16, and 5733.58 of the Revised Code shall not exceed
the amount, estimated by the director of development, that would
cause the total amount of credits allowed each fiscal year to
exceed ten million dollars, computed without regard to the
potential for taxpayers to carry tax credits forward to later
years.

(D) If any amount of the federal tax credit allowed for a
qualified equity investment for which a credit was received under
this section is recaptured under section 45D of the Internal
Revenue Code, or if the director of development services
determines that an investment for which a tax credit is claimed
under this section is not a qualified equity investment or that
the proceeds of an investment for which a tax credit is claimed
under this section are used to make qualified low-income community
investments other than in a qualified active low-income community
business, all or a portion of the credit received on account of
that investment shall be paid by the insurance company that
received the credit to the superintendent of insurance. The amount
to be recovered shall be determined by the director of development
services pursuant to rules adopted under division (E) of this
section. The director shall certify any amount due under this
division to the superintendent of insurance, and the
superintendent shall notify the treasurer of state of the amount
due. Upon notification, the treasurer shall invoice the insurance
company for the amount due. The amount due is payable not later
than thirty days after the date the treasurer invoices the
insurance company. The amount due shall be considered to be tax
due under section 5725.18 of the Revised Code, and may be
collected by assessment without regard to the time limitations
imposed under section 5725.222 of the Revised Code for the
assessment of taxes by the superintendent. All amounts collected
under this division shall be credited as revenue from the tax
levied under section 5725.18 of the Revised Code.

(E) The tax credits authorized under this section and
sections 5726.54, 5729.16, and 5733.58 of the Revised Code shall
be administered by the department of development services. The
director of development services, in consultation with the tax
commissioner and the superintendent of insurance, pursuant to
Chapter 119. of the Revised Code, shall adopt rules for the
administration of this section and sections 5726.54, 5729.16, and
5733.58 of the Revised Code. The rules shall provide for
determining the recovery of credits under division (D) of this
section, division (D) of sectionand under sections 5726.54,
5729.16, and section 5733.58 of the Revised Code, including
prorating the amount of the credit to be recovered on any
reasonable basis, the manner in which credits may be allocated
among claimants, and the amount of any application or other fees
to be charged in connection with a recovery.

(F) There is hereby created in the state treasury the new
markets tax credit operating fund. The director of development
services is authorized to charge reasonable application and other
fees in connection with the administration of tax credits
authorized by this section and sections 5726.54, 5729.16, and
5733.58 of the Revised Code. Any such fees collected shall be
credited to the fund. The director of development services shall
use money in the fund to pay expenses related to the
administration of tax credits authorized under sections 5725.33,
5726.54, 5729.16, and 5733.58 of the Revised Code.

(3) A bank, banking association, trust company, savings and
loan association, savings bank, or other banking institution that
is organized or incorporated under the laws of the United States,
any state, or a foreign country;

(5) Any agency or branch of a foreign bank, as those terms
are defined in 12 U.S.C. 3101;

(6) An entity licensed as a small business investment company
under the "Small Business Investment Act of 1958," 72 Stat. 689,
15 U.S.C. 661, et seq.;

(7) A company chartered under the "Farm Credit Act of 1933,"
48 Stat. 257, or a successor of such a company.

"Bank organization" does not include an institution organized
under the "Federal Farm Loan Act," 39 Stat. 360 (1916), or a
successor of such an institution, an insurance company, or a
credit union.

(B) "Call report" means the consolidated reports of condition
and income prescribed by the federal financial institutions
examination council that a person is required to file with a
federal regulatory agency pursuant to 12 U.S.C. 161, 12 U.S.C.
324, or 12 U.S.C. 1817.

(C) "Credit union" means a nonprofit cooperative financial
institution organized or chartered under the laws of this state,
any other state, or the United States.

(D) "Document of creation" means the articles of
incorporation of a corporation, articles of organization of a
limited liability company, registration of a foreign limited
liability company, certificate of limited partnership,
registration of a foreign limited partnership, registration of a
domestic or foreign limited liability partnership, or registration
of a trade name.

(E) "Financial institution" means a bank organization or a
holding company of a bank organization, except when one of the
following applies:

(1) If two or more such entities are consolidated for the
purposes of filing an FR Y-9, "financial institution" means a
group consisting of all entities that are included in the FR Y-9.

(2) If two or more such entities are consolidated for the
purposes of filing a call report, "financial institution" means a
group consisting of all entities that are included in the call
report and that are not included in a group described in division
(E)(1) of this section.

"Financial institution" does not include a diversified
savings and loan holding company as defined in 12 U.S.C. 1467a, as
that section existed on January 1, 2012, or a grandfathered
unitary savings and loan holding company as defined in 12 U.S.C.
1467b.

(F) "FR Y-9" means the consolidated or parent-only financial
statements that a holding company is required to file with the
federal reserve board pursuant to 12 U.S.C. 1844. In the case of a
holding company required to file both consolidated and parent-only
financial statements, "FR Y-9" means the consolidated financial
statements that the holding company is required to file.

(G) "Gross receipts" means all items of income, without
deduction for expenses. If the reporting person for a taxpayer is
a holding company, "gross receipts" includes all items of income
reported on the FR Y-9 filed by the holding company. If the
reporting person for a taxpayer is a bank organization, "gross
receipts" includes all items of income reported on the call report
filed by the bank organization.

(H) "Insurance company" means every corporation, association,
and society engaged in the business of insurance of any character,
or engaged in the business of entering into contracts
substantially amounting to insurance of any character, or of
indemnifying or guaranteeing against loss or damage, or acting as
surety on bonds or undertakings. "Insurance company" also includes
any health insuring corporation as defined in section 1751.01 of
the Revised Code.

(I) "Reporting person" means one of the following:

(1) In the case of a financial institution described in
division (E)(1) of this section, the top-tier holding company
required to file an FR Y-9 unless the top-tier holding company is
a diversified savings and loan holding company, as defined in 12
U.S.C. 1467a, as that section existed on January 1, 2012, or a
grandfathered unitary savings and loan holding company as defined
in 12 U.S.C. 1467b. If the top-tier holding company is such a
holding company, then the reporting person shall be the bank
organization.

(2) In the case of a financial institution described in
division (E)(2) of this section, the bank organizationrequired to
file the call report.

(3) In the case of a bank organization that is not included
in a group described in division (E)(1) or (2) of this section,
the bank organization.

(J) "Tax year" means the calendar year for which the tax
levied under section 5726.02 of the Revised Code is required to be
paid.

(K) "Taxable year" means the calendar year preceding the year
in which an annual report is required to be filed under section
5726.03 of the Revised Code.

(L) "Taxpayer" means a financial institution subject to the
tax levied under section 5726.02 of the Revised Code.

(M) "Total equity capital" means the sum of the common stock
at par value, perpetual preferred stock and related surplus, other
surplus not related to perpetual preferred stock, retained
earnings, accumulated other comprehensive income, treasury stock,
unearned employee stock ownership plan shares, and other equity
components of a financial institution. "Total equity capital"
shall include any noncontrolling (minority) interests in
consolidated subsidiaries that are financial institutions, as
reported on a financial institution's FR Y-9 or call report, but
shall not include such interests in consolidated subsidiaries that
are not financial institutions.

(N) "Total Ohio equity capital" means the portion of the
total equity capital of a financial institution apportioned to
Ohio pursuant to section 5726.05 of the Revised Code.

(O) "Holding company" does not include a diversified savings
and loan holding company as defined in 12 U.S.C. 1467a, as that
section existed on January 1, 2012, or a grandfathered unitary
savings and loan holding company as defined in 12 U.S.C. 1467b.

Sec. 5726.02. (A) For the purpose of funding the needs of
this state and its local governments beginning with the tax year
that commences on January 1, 2014, and continuing for every tax
year thereafter, there is hereby levied a tax on each financial
institution for the privilege of doing business in this state. A
financial institution is subject to the tax imposed under this
chapter for each calendar year that the financial institution
conducts business as a financial institution in this state or
otherwise has nexus in or with this state under the Constitution
of the United States on the first day of January of that calendar
year.

(B) The amount of tax a financial institution is required to
pay under this chapter shall equal the greater of the minimum tax
required under division (A)(1) of section 5726.04 of the Revised
Code or the amount by which the tax calculated under division
(A)(2) of that section exceeds any credits allowed against the
tax.

Sec. 5726.03. (A)(1) Annually, on or before the thirty-first
day of March, or on or before a later date as extended under
division (B) of this section, the reporting person for each
taxpayer shall make a report in writing to the tax commissioner,
in such form as the commissioner prescribes, and shall remit to
the commissioner the amount of tax shown to be due on the report.
The remittance shall be made payable to the treasurer of state.
The commissioner shall make available, on the official internet
web site of the department of taxation, copies of the forms
prescribed by the commissioner for the purpose of making the
annual report.

(2) An annual report shall be signed by the president,
vice-president, secretary, treasurer, general manager,
superintendent, or managing agent in this state of the reporting
person.

(3) An annual report shall contain the facts, figures,
computations, and attachments that result in the determination of
the amount of tax due from a taxpayer under this chapter.

(B) The tax commissioner may extend the period of time for
filing an annual report to the fifteenth day of the month
following the due date, including extensions thereof, for the
filing of the federal corporate income tax return for the taxable
year. The extension of time to file an annual report shall not
extend the time for payment of the tax. Any tax not paid on or
before the due date for such payment shall be subject to penalty
and interest as provided in this chapter.

(C)(1) In the case of a financial institution described in
division (E)(1) of section 5726.01 of the Revised Code, the annual
report filed for a taxable year shall list, and include
information related to, each person includable in an FR Y-9 filed
by the reporting person for that taxable year.

(2) In the case of a financial institution described in
division (E)(2) of section 5726.01 of the Revised Code, the annual
report for a taxable year shall list, and include information
related to, each person includable in a call report filed by the
reporting person for that taxable year.

(D)(1) The reporting person for a taxpayer shall remit each
tax payment and, if required by the commissioner, file each annual
or estimated tax report electronically. The commissioner may
require reporting persons to use the Ohio business gateway as
defined in section 718.051 of the Revised Code to file reports and
remit the tax, or may provide another means for reporting persons
to file and remit the tax electronically.

(2) The payment of taxes as provided in division (D) of this
section shall not affect a taxpayer's obligation to file an annual
report required under division (A) of this section.

(3) The reporting person for a taxpayer that is required to
remit tax payments electronically under this section may apply to
the tax commissioner, in the manner prescribed by the
commissioner, to be excused from that requirement. The
commissioner may excuse the taxpayer from the requirements of
division (D) of this section for good cause.

(4) If the reporting person for a taxpayer that is required
to remit tax payments or file reports electronically under this
section fails to do so, the commissioner may impose a penalty not
to exceed the following:

(a) For either of the first two reports the person so fails,
five per cent of the amount of the payment that was required to be
remitted;

(b) For the third and any subsequent reports the person so
fails, ten per cent of the amount of the payment that was required
to be remitted.

The penalty imposed under this section is in addition to any
other penalty or charge imposed under this chapter and shall be
considered as revenue arising from the tax levied under this
chapter. A penalty may be collected by assessment in the manner
prescribed by section 5726.20 of the Revised Code. The tax
commissioner may abate all or a portion of such a penalty and may
adopt rules governing such abatements.

Sec. 5726.04. (A) The tax levied on a financial institution
under this chapter shall be the greater of the following:

(1) A minimum tax equal to one thousand dollars;

(2) The product of the total Ohio equity capital of the
financial institution, as determined under this section,
multiplied by eight mills for each dollar of the first five
hundred million dollars of total Ohio equity capital and by two
and one-half mills for each dollar of total Ohio equity capital in
excess of five hundred million dollars.

(B) The total equity capital of a financial institution shall
equal the total equity capital shown on the reporting person's FR
Y-9 or call report as of the end of the taxable year.

(C) For the purposes of this section, "total Ohio equity
capital" means the product of the total equity capital of a
financial institution as of the end of a taxable year multiplied
by the Ohio apportionment ratio calculated for the financial
institution under section 5726.05 of the Revised Code.

(D) All payments received from the tax levied under this
chapter shall be credited to the general revenue fund.

(E)(1) As used in this division:

(a) "Target tax amount" means two hundred five million
dollars.

(b) "Amount of taxes collected" means the amount of taxes
received by the tax commissioner from the tax levied under this
chapter for a tax year, less any amounts refunded to taxpayers for
the same tax year.

(2) If, for the tax year beginning on January 1, 2014, the
total amount of taxes collected from all taxpayers under this
chapter is greater than one hundred ten per cent of the target tax
amount, the tax commissioner shall decrease each tax rate provided
in division (A)(2) of this section by a percentage equal to the
difference of (a) the percentage by which the amount of taxes
collected exceeded the target tax amount minus (b) ten per cent of
the target tax amount.

(3) If, for the tax year beginning on January 1, 2014, the
total amount of taxes collected from all taxpayers under this
chapter is less than ninety per cent of the target tax amount, the
tax commissioner shall increase each tax rate provided in division
(A)(2) of this section by a percentage equal to the difference of
(a) the percentage by which the target tax amount exceeded the
amount of taxes collected minus (b) ten per cent of the target tax
amount.

(4) Tax rates adjusted pursuant to division (E)(2) or (3) of
this section shall be rounded to the nearest one-tenth of one mill
per dollar. The tax commissioner shall publish the new tax rates
by journal entry and provide notice of the new tax rates to
taxpayers. The new tax rates shall apply to tax years beginning on
or after January 1, 2015.

Sec. 5726.05. (A) An apportionment factor shall be used to
determine the total Ohio equity capital of a financial
institution. The factor shall be based upon the gross receipts
generated by the financial institution and reported in the same
manner as provided for the determination of the financial
institution's total equity capital for a tax year under division
(B) of section 5726.04 of the Revised Code.

(B) The apportionment factor is a fraction, the numerator of
which is the total gross receipts of the financial institution in
this state during the taxable year and the denominator of which is
the total gross receipts of the financial institution everywhere
during the taxable year. Gross receipts generated by a financial
institution shall be sitused to this state in the proportion that
the customers' benefit in this state with respect to the services
received bears to the customers' benefit everywhere with respect
to the services received. The physical location where the customer
ultimately uses or receives the benefit of what was received shall
be paramount in determining the proportion of the benefit in this
state to the benefit everywhere. The method of calculating gross
receipts for purposes of the denominator shall be the same as the
method used in determining gross receipts for purposes of the
numerator.

(C) The following are examples of gross receipts to be
included in the numerator of the apportionment factor:

(1) Receipts from the lease, sublease, rental, or subrental
of real property located in this state;

(2) Receipts from the lease, sublease, rental, or subrental
of tangible personal property to the extent such property is used
in this state;

(3) Interest, fees, penalties, or any other charge received
from loans secured by real property located within this state;

(4) Interest, fees, penalties, or any other charge received
from loans not secured by real property if the borrower is located
in this state;

(5) The amount of positive net gains from the sale of loans
secured by real property located in this state;

(6) The amount of positive net gains from the sale of loans
not secured by real property if the borrower is located in this
state;

(7) Interest, annual fees, penalties, or any other charges
received from credit card receivables and from cardholders if the
billing address of the cardholder is located in this state;

(8) The amount of positive net gains from the sale of credit
card receivables if the billing address of the cardholder is
located in this state;

(9) Reimbursement fees of a credit card issuer if the billing
address of the cardholder is located in this state;

(10) Receipts from merchant discounts if the merchant is
located in this state;

(11) Loan servicing fees derived from loans secured by real
property located in this state;

(12) Loan servicing fees derived from loans not secured by
real property if the borrower is located in this state;

(13) Loan servicing fees derived from servicing loans from
other financial institutions if the borrower is located in this
state;

(14) Interest, dividends, positive net gains, and other
income from investment assets and activities and from trading
assets and activities proportionate to the taxpayer's customers
located in this state;

(15) Receipts not otherwise listed herein if the payor of
those receipts is located in this state.

(D) Receipts from investment assets and activities and
trading assets and activities, including interest and dividends,
are in this state to the extent the financial institution's
customers are in this state. This shall be determined by applying
the gross receipts factor calculated in division (B) of this
section to the investment assets and activities and trading assets
and activities. "Investment assets and activities and trading
assets and activities" includes interest, dividends, and other
income from assets and activities, including, but not limited to:
investment securities; trading account assets; federal funds;
securities purchased and sold under agreements to resell or
repurchase; options; futures contracts; forward contracts;
notional principal contracts such as swaps; equities; foreign
currency transactions; amounts in the matched book and in the
arbitrage book, but excluding amounts otherwise sourced in this
section.

(E) If the apportionment provisions of this section do not
fairly represent the extent of the taxpayer's business activity in
this state, the taxpayer may request, or the tax commissioner may
require or permit, an alternative method. Such a request must be
made within any applicable statute of limitations set forth in
this chapter.

(F) A financial institution's "gross receipts" for purposes
of the calculation required by division (B) of this section shall
be determined using the financial institution's method of
accounting for income tax purposes. If a financial institution's
method of accounting is changed for income tax purposes, its
method of accounting for purposes of the calculation required by
division (B) of this section shall be changed accordingly.

(G) The tax commissioner shall adopt administrative rules to
provide additional guidance for the application of this section.

Sec. 5726.06. (A) The reporting person for a taxpayer shall
file estimated tax reports and remit the amount of tax estimated
to be due for a tax year to the tax commissioner as follows:

(1) The minimum tax required under division (A)(1) of section
5726.04 of the Revised Code or one-third of the estimated tax,
whichever is greater, on or before the thirty-first day of January
of the tax year;

(2) One-half of the amount by which the estimated tax exceeds
the amount paid under division (A)(1) of this section on or before
the thirty-first day of March of the tax year;

(3) One-half of the amount by which the estimated tax exceeds
the amount paid under division (A)(1) of this section on or before
the thirty-first day of May of the tax year.

(B)(1) The reporting person for a taxpayer shall remit the
estimated tax electronically as provided in division (D) of
section 5726.03 of the Revised Code. Remittance shall be made
payable to the treasurer of state.

(2) The tax commissioner shall immediately forward to the
treasurer of state all amounts received under this section, and
the treasurer of state shall credit all payments of such estimated
tax as provided in division (D) of section 5726.04 of the Revised
Code.

(C)(1) If a taxpayer was not subject to the tax imposed by
section 5726.02 of the Revised Code for the preceeding tax year,
"estimated tax" for purposes of division (A)(1) of this section
means ninety per cent of the qualifying net tax for the tax year.
If a taxpayer was subject to the tax for the preceding tax year,
"estimated tax" for purposes of division (A)(1) of this section
means the lesser of one hundred per cent of the taxpayer's
qualifying net tax for the preceding tax year or ninety per cent
of the qualifying net tax for the tax year.

(2) If the taxpayer did not file a report under section
5726.02 of the Revised Code for the tax year or failed to prepare
and file the report in good faith for the tax year, "qualifying
net tax" as used in division (C)(1) of this section for that tax
year means the amount described in division (C)(2)(a) of this
section. Otherwise, "qualifying net tax" as used in division
(C)(1) of this section for that tax year means the lesser of the
amount described in division (C)(2)(a) or (b) of this section.

(a) The tax imposed by section 5726.02 of the Revised Code
for that tax year reduced by the credits listed in section 5726.98
of the Revised Code. If the credits exceed the total tax, the
qualifying net tax is the minimum tax.

(b) The lesser of the tax shown on the report, prepared and
filed in good faith, reduced by the credits shown on that report,
or the tax shown on an amended report, prepared and filed in good
faith, reduced by the credits shown on that amended report. If the
credits shown exceed the total tax shown, the qualifying net tax
is the minimum tax.

Sec. 5726.07. (A) In the case of an underpayment of estimated
taxes required to be paid under section 5726.06 of the Revised
Code, interest upon the amount of underpayment, calculated at the
rate per annum prescribed by section 5703.47 of the Revised Code
for the period of underpayment, shall be added to the tax due for
the tax year for which the estimated tax is paid.

(B) The amount of underpayment upon which such interest is
computed equals the amount by which division (B)(1) of this
section exceeds division (B)(2) of this section.

(1) The amount of the estimated tax payment that would be
required to be paid if the total estimated tax due were equal to
the amount of tax shown to be due on the annual report filed for
the tax year or, if no report was filed, the total amount of tax
due for the tax year;

(2) The amount, if any, of the estimated tax that has been
paid on or before the last day prescribed for such payment.

(C) The period of underpayment for which such interest is
computed shall run from the date the estimated tax payment was
required to be made to the date the payment is made.

For purposes of this section, a payment of estimated tax on
any payment date shall be considered a payment of any previous
underpayment only to the extent that such payment exceeds the
amount of payment currently due.

Sec. 5726.08. Except as otherwise provided in this section,
if any report, claim, statement, or other document required to be
filed, or any payment required to be made, within a prescribed
period or on or before a prescribed date under this chapter is,
after such period or date, delivered by United States mail to the
agency, officer, or office with which such report, claim,
statement, or other document is required to be filed, or to which
such payment is required to be made, the date of the postmark
stamped on the cover in which such report, claim, statement, or
other document, or payment is mailed shall be deemed the date of
delivery or the date of payment.

If a payment is made electronically, the payment is
considered to be made when the payment is received by the
treasurer of state or credited to an account designated by the
treasurer of state for the receipt of tax payments.

As used in this section, "the date of the postmark" means, in
the event there is more than one date on the cover, the earliest
date imprinted on the cover by the post office.

Sec. 5726.10. The tax commissioner shall enforce and
administer this chapter. In addition to any other powers conferred
upon the commissioner by law, the commissioner may do any of the
following:

(A) Prescribe all forms required to be filed pursuant to this
chapter;

(B) Promulgate such rules and regulations as the commissioner
finds necessary to carry out this chapter;

(C) Appoint and employ such personnel as are necessary to
carry out the duties imposed upon the commissioner by this
chapter.

Sec. 5726.20. (A) The tax commissioner may make an
assessment, based on any information in the commissioner's
possession, against any person that fails to file a return or
report or pay any tax as required by this chapter. The reporting
person for a taxpayer shall file the annual report required under
section 5726.02 of the Revised Code and remit the tax imposed by
this chapter. Each person included in the annual report of the
taxpayer is jointly and severally liable for the tax imposed by
this chapter and any penalties and interest thereon. If the
reporting person fails, for any reason, to file and remit any tax,
the amount due may be collected by assessment against the
reporting person and against any or all other persons required to
be included in the annual report of the taxpayer in the manner
provided by this section. The commissioner shall give the person
assessed written notice of the assessment as provided in section
5703.37 of the Revised Code. With the notice, the commissioner
shall provide instructions on the manner in which to petition for
reassessment and request a hearing with respect to the petition.

(B) No assessment shall be made or issued against a person
under this section more than four years after the later of the
final date the report subject to assessment was required to be
filed or the date such report was filed. Such time limit may be
extended if both the person and the commissioner consent in
writing to the extension or if an agreement waiving or extending
the time limit has been entered into pursuant to section 122.171
of the Revised Code. Any such extension shall extend the four-year
time limit prescribed in division (A) of section 5726.30 of the
Revised Code for the same period of time. There shall be no bar or
limit to an assessment against a person that fails to file a
report subject to assessment as required by this chapter, or that
files a fraudulent report.

(C) Unless the person assessed, within sixty days after
service of the notice of assessment, files with the tax
commissioner, either in person or by certified mail, a written
petition for reassessment signed by the person or the person's
authorized agent having knowledge of the facts, the assessment
shall become final, and the amount of the assessment is due and
payable from the person assessed to the treasurer of state. A
petition shall indicate the objections of the person assessed, but
additional objections may be raised in writing if received by the
commissioner prior to the date shown on the final determination.
If a petition for reassessment has been properly filed, the
commissioner shall proceed under section 5703.60 of the Revised
Code.

(D)(1) After an assessment becomes final, if any portion of
the assessment, including any accrued interest, remains unpaid, a
certified copy of the tax commissioner's entry making the
assessment final may be filed in the office of the clerk of the
court of common pleas in the county in which the person resides or
has its principal place of business in this state, or in the
office of the clerk of court of common pleas of Franklin county.

(2) Immediately upon the filing of the entry, the clerk shall
enter judgment for the state against the person assessed in the
amount shown on the entry. The judgment may be filed by the clerk
in a loose-leaf book entitled, "special judgments for the
financial institution tax" and shall have the same effect as other
judgments. Execution shall issue upon the judgment at the request
of the tax commissioner, and all laws applicable to sales on
execution shall apply to sales made under the judgment.

(3) The portion of the assessment not paid within sixty days
after the day the assessment was issued shall bear interest at the
rate per annum prescribed by section 5703.47 of the Revised Code
from the date the tax commissioner issues the assessment until the
date the assessment is paid. Interest shall be paid in the same
manner as the tax and may be collected by the issuance of an
assessment under this section.

(E) If the tax commissioner believes that collection of the
tax imposed by this chapter will be jeopardized unless proceedings
to collect or secure collection of the tax are instituted without
delay, the commissioner may issue a jeopardy assessment against
the person liable for the tax. Immediately upon the issuance of
the jeopardy assessment, the commissioner shall file an entry with
the clerk of the court of common pleas in the manner prescribed by
division (D) of this section. Notice of the jeopardy assessment
shall be served on the person assessed or the person's authorized
agent in the manner provided in section 5703.37 of the Revised
Code within five days of the filing of the entry with the clerk.
The total amount assessed shall be immediately due and payable,
unless the person assessed files a petition for reassessment in
accordance with division (C) of this section and provides security
in a form satisfactory to the commissioner and in an amount
sufficient to satisfy the unpaid balance of the assessment. Full
or partial payment of the assessment shall not prejudice the
commissioner's consideration of the petition for reassessment.

(F) The tax commissioner shall immediately forward to the
treasurer of state all amounts the commissioner receives under
this section. Such amounts shall be considered as revenue arising
from the tax imposed by this chapter.

(G) If the tax commissioner possesses information indicating
that the amount of tax a taxpayer is required to pay under this
chapter exceeds the amount the reporting person for the taxpayer
paid, the tax commissioner may audit a sample of the taxpayer's
gross receipts over a representative period of time to ascertain
the amount of tax due, and may issue an assessment based on the
audit. The tax commissioner shall make a good faith effort to
reach agreement with the taxpayer in selecting a representative
sample. The tax commissioner may apply a sampling method only if
the commissioner has prescribed the method by rule.

(H) If the whereabouts of a person subject to this chapter is
not known to the tax commissioner, the secretary of state is
hereby deemed to be that person's agent for purposes of service of
process or notice of any assessment, action, or proceedings
instituted in this state against the person under this chapter.
Such process or notice shall be served on such person by the
commissioner or by an agent of the commissioner by leaving a true
and attested copy of the process or notice at the office of the
secretary of state at least fifteen days before the return day of
such process or notice, and by sending a copy of the process or
notice to such person by ordinary mail, with an endorsement
thereon of the service upon the secretary of state, addressed to
such person at the person's last known address.

Sec. 5726.21. (A) In addition to any other penalty imposed by
this chapter or Chapter 5703. of the Revised Code, the following
penalties shall apply:

(1) If a taxpayer required to file any report under this
chapter fails to make and file the report within the time
prescribed, including any extensions of time granted by the tax
commissioner, a penalty may be imposed not exceeding the greater
of fifty dollars per month or fraction of a month, not to exceed
five hundred dollars, or five per cent per month or fraction of a
month, not to exceed fifty per cent of the tax required to be
shown on the report, for each month or fraction of a month
elapsing between the due date, including extensions of the due
date, and the date on which the report is filed.

(2) If a taxpayer fails to pay the amount of tax required to
be paid under this chapter, except for estimated tax under section
5726.06 of the Revised Code, by the dates prescribed in this
chapter for payment, a penalty may be imposed not exceeding
fifteen per cent of the delinquent payment.

(3) If a taxpayer files what purports to be a report required
by this chapter that does not contain information upon which the
substantial correctness of the report may be judged or contains
information that on its face indicates that the report is
substantially incorrect, and the filing of the report in that
manner is due to a position that is frivolous or a desire that is
apparent from the report to delay or impede the administration of
the tax levied under this chapter, a penalty of up to five hundred
dollars may be imposed.

(4) If a taxpayer makes a fraudulent attempt to evade the
reporting or payment of the tax required to be shown on any report
required under this chapter, a penalty may be imposed not
exceeding the greater of one thousand dollars or one hundred per
cent of the tax required to be shown on the report.

(5) If a taxpayer makes a false or fraudulent claim for a
refund under this chapter, a penalty may be imposed not exceeding
the greater of one thousand dollars or one hundred per cent of the
claim.

(B) The tax commissioner may collect any penalty imposed by
this section in the same manner as the tax levied under this
chapter. Penalties so collected shall be considered as revenue
arising from the tax levied under this chapter.

(C) For purposes of this section, the tax required to be
shown on the report shall be reduced by the amount of any part of
the tax paid on or before the date, including extensions of the
date, prescribed for filing the report.

(D) The tax commissioner may abate all or a portion of any
penalties imposed under this section and may adopt rules governing
such abatements.

Sec. 5726.30. (A) The tax commissioner shall refund the
amount of taxes imposed under this chapter that a person overpaid,
paid illegally or erroneously, or paid on an illegal or erroneous
assessment. The person shall file an application for refund with
the tax commissioner, on the form prescribed by the commissioner,
within four years after the date of the illegal or erroneous
payment of the tax, or within any additional period allowed under
division (B) of section 5726.20 of the Revised Code. The applicant
shall provide the amount of the requested refund along with the
claimed reasons for, and documentation to support, the issuance of
a refund.

For purposes of this division, a payment that an applicant
made before the due date or extended due date for filing the
report to which the payment relates shall be deemed to have been
made on the due date or extended due date of the report.

(B) Upon the filing of a refund application, the tax
commissioner shall determine the amount of refund to which the
applicant is entitled. If the amount is not less than that
claimed, the commissioner shall certify the amount to the director
of budget and management and treasurer of state for payment from
the tax refund fund created under section 5703.052 of the Revised
Code. If the amount is less than that claimed, the commissioner
shall proceed in accordance with section 5703.70 of the Revised
Code.

(C)(1) Except as provided in division (C)(2) of this section,
interest on a refund applied for under this section, computed at
the rate provided for in section 5703.47 of the Revised Code,
shall be allowed from the later of the date the tax was paid or
the date the tax payment was due until the refund is paid.

(2) No interest shall be allowed under this section on an
amount refunded to a person to the extent that the refund results
from the allowance of a refundable credit against the tax imposed
by section 5726.02 of the Revised Code.

Sec. 5726.31. As used in this section, "debt to this state"
means unpaid taxes due the state, unpaid workers' compensation
premiums due under section 4123.35 of the Revised Code, unpaid
unemployment compensation contributions due under section 4141.25
of the Revised Code, unpaid unemployment compensation payments in
lieu of contributions due under section 4141.241 of the Revised
Code, unpaid claims certified under section 131.02 or 131.021 of
the Revised Code, unpaid fees payable to the state or to the clerk
of courts pursuant to section 4505.06 of the Revised Code or any
unpaid charge, penalty, or interest arising from any of the
foregoing.

If a person entitled to a refund under section 5726.30 of the
Revised Code owes any debt to this state, the amount refundable
may be applied in satisfaction of the debt. If the amount
refundable is less than the amount of the debt, it may be applied
in partial satisfaction of the debt. If the amount refundable is
greater than the amount of the debt, the amount remaining after
satisfaction of the debt shall be refunded. If the taxpayer has
more than one such debt, any debt subject to section 5739.33 or
division (G) of section 5747.07 of the Revised Code shall be
satisfied first.

Except as provided in section 131.021 of the Revised Code,
this section applies only to debts that have become final. For the
purposes of this section, a debt becomes final when, under the
applicable law, any time provided for petition for reassessment,
request for reconsideration, or other appeal of the legality or
validity of the amount giving rise to the debt expires without an
appeal having been filed in the manner provided by law.

The tax commissioner may charge each respective agency of the
state for the commissioner's cost in applying refunds to debts due
to the state and may charge the attorney general for the
commissioner's cost in applying refunds to certified claims. The
commissioner may promulgate rules to implement this section.

The commissioner may, with the consent of the reporting
person for a taxpayer, provide for the crediting of the amount of
any refund due to the taxpayer under this chapter for a tax year
against the tax due for any succeeding tax year.

Sec. 5726.32. If any tax due under this chapter is not paid
on or before the date prescribed for its payment, interest shall
be assessed, collected, and paid, in the same manner as the tax,
upon such unpaid amount at the rate per annum prescribed by
section 5703.47 of the Revised Code from the date prescribed for
the payment of the tax until the date the tax is paid or the date
an assessment is issued under section 5726.20 of the Revised Code,
whichever is earlier. Interest so collected shall be considered as
revenue arising from the tax imposed by this chapter.

Sec. 5726.33. (A) As used in this section, "qualifying refund
overpayment" means an amount received by a taxpayer in excess of a
refund claimed or a request for payment made by the reporting
person for the taxpayer on a return, report, or other document
filed with the tax commissioner.

(B) A taxpayer is not liable for any interest or penalty with
respect to the repayment of a qualifying refund overpayment if the
reporting person for the taxpayer pays the entire amount of the
qualifying refund overpayment to the commissioner not later than
thirty days after the taxpayer receives an assessment for the
amount. If the reporting person does not pay the entire amount of
the overpayment to the commissioner within the time prescribed by
this section, interest shall accrue on the amount of the
deficiency pursuant to section 5726.32 of the Revised Code from
the date the commissioner issues the assessment until the date the
deficiency is paid.

Sec. 5726.36. (A) A person shall notify the tax commissioner
when the person is no longer subject to the tax imposed by this
chapter.

(B) If the ownership structure of a financial institution
changes such that a person is no longer includable in the annual
report of the financial institution, the reporting person for the
financial institution shall notify the commissioner of the change
when the reporting person files its next annual report or in
writing prior to the due date of that report.

Sec. 5726.40. If a person, wherever organized, doing business
in this state or owning or issuing all or part of the entity's
capital or property in this state, and required by law to file any
report or return or to pay any tax or fee under Title LVII of the
Revised Code, fails or neglects to make such report or return or
to pay any such tax or fee for ninety days after the time
prescribed by law for making such report or return or for paying
such tax or fee, the tax commissioner shall certify such fact to
the secretary of state. The secretary of state shall thereupon
cancel the document of creation authorizing the person to do
business in this state. Upon such cancellation, all of the powers,
privileges, and franchises conferred upon that person by its
document of creation shall cease, subject to section 1701.88 of
the Revised Code. The secretary of state shall immediately notify
the person of the action taken by the secretary, and shall also
forward for filing a certificate of the action so taken to the
county recorder of the county in which the principal place of
business of the person in this state is located. No fee shall be
charged for the filing.

Sec. 5726.41. No person shall exercise, or attempt to
exercise, any powers, privileges, or franchises under the person's
document of creation after the document is canceled pursuant to
section 5726.40 of the Revised Code. A penalty of one hundred
dollars shall be imposed for each day a violation of this section
occurs, up to a maximum penalty of five thousand dollars.

Sec. 5726.42. (A)(1) A person whose document of creation has
been canceled by the secretary of state pursuant to section
5726.40 the Revised Code shall be reinstated and again entitled to
exercise its rights, privileges, and franchises in this state upon
compliance with all of the following:

(a) Filing with the secretary of state a certificate from the
tax commissioner that the person has complied with all the
requirements of law as to tax reports and paid all taxes, fees, or
penalties due thereon for every year of delinquency;

(b) Payment to the secretary of state of any additional fees
and penalties required to be paid to the secretary of state;

(c) Payment to the secretary of state of an additional fee of
ten dollars.

Upon the person's compliance with this division, the
secretary of state shall cancel the entry of cancellation filed
under section 5726.40 of the Revised Code.

(2) If a reinstatement is not made within one year from the
date of cancellation of the document of creation, and if it
appears that a document of creation has been issued to a person of
the same or similar name as the applicant for reinstatement, the
secretary of state shall require, as a condition prerequisite to
such reinstatement, that the applicant amend its document of
creation by changing the applicant's name.

(B) Any officer, shareholder, creditor, or receiver of a
person may at any time take all steps required by this section to
effect a reinstatement.

(C) The rights, privileges, and franchises of a person whose
document of creation has been reinstated in accordance with this
section are subject to section 1701.922 of the Revised Code.

(D) Notwithstanding a violation of section 5726.41 of the
Revised Code, upon reinstatement of a person's document of
creation in accordance with this section, neither section 5726.40
nor section 5726.41 of the Revised Code shall be applied to
invalidate the exercise or attempt to exercise any right,
privilege, or franchise on behalf of the person by an officer,
agent, or employee of the person after cancellation and prior to
the reinstatement of the document of creation, if the conditions
set forth in divisions (B)(1)(a) and (b) of section 1701.922 of
the Revised Code are met.

Sec. 5726.43. If any financial institution fails to make and
file any return or report required under this chapter, or to pay
the penalties provided by law for failure to make and file such
reports or returns, for a period of ninety days after the time
prescribed by law, the attorney general, on the request of the tax
commissioner, shall commence an action in quo warranto in the
court of appeals of the county in which the reporting person for
the financial institution has its principal place of business in
this state to forfeit and annul the privileges and franchises of
each person included in the annual report of the financial
institution. If the court is satisfied that any such financial
institution is in default, it shall render judgment ousting each
person included in the annual report of the financial institution
from the exercise of its privileges and franchises within this
state, and shall otherwise proceed as provided in sections 2733.01
to 2733.39 of the Revised Code.

Sec. 5726.50. (A) A taxpayer may claim a refundable tax
credit against the tax imposed under this chapter for each person
included in the annual report of the taxpayer that is granted a
credit by the tax credit authority under section 122.17 or
division (B)(2) or (3) of section 122.171 of the Revised Code.
Such a credit shall not be claimed for any tax year following the
calendar year in which a relocation of employment positions occurs
in violation of an agreement entered into under section 122.171 of
the Revised Code. For the purpose of making tax payments under
this chapter, taxes equal to the amount of the refundable credit
shall be considered to be paid on the first day of the tax year.

(B) A taxpayer may claim a nonrefundable tax credit against
the tax imposed under this chapter for each person included in the
annual report of the taxpayer that is granted a credit by the tax
credit authority under division (B)(1) of section 122.171 of the
Revised Code. A taxpayer may claim against the tax imposed by this
chapter any unused portion of the credits authorized under
division (B) of section 5733.0610 of the Revised Code.

(C) The credits authorized in divisions (A) and (B) of this
section shall be claimed in the order required under section
5726.98 of the Revised Code. If the amount of a credit authorized
in division (A) of this section exceeds the tax otherwise due
under section 5726.02 of the Revised Code after deducting all
other credits preceding the credit in the order prescribed in
section 5726.98 of the Revised Code, the excess shall be refunded
to the taxpayer.

Sec. 5726.51. A taxpayer may claim a nonrefundable credit
against the tax imposed under this chapter for each bank
organization that is organized under Title XI of the Revised Code
and included in the annual report of the taxpayer. The credit
shall equal the sum of the annual assessments such bank
organizations paid during the taxable year to the division of
financial institutions pursuant to Title XI of the Revised Code
and the schedule of fees published by the division. A taxpayer may
claim against the tax imposed by this chapter any unused portion
of the credits authorized under section 5733.063 of the Revised
Code.

The credit authorized by this section shall be claimed in the
order required under section 5726.98 of the Revised Code. The
credit shall not be allowed unless there is filed with the
taxpayer's annual report a document certified by the division of
financial institutions verifying the amount of state annual
assessment fees and federal supervisory fees paid by the bank
organizations during the taxable year.

Sec. 5726.52. (A) As used in this section, "certificate
owner" has the same meaning as in section 149.311 of the Revised
Code.

(B) A taxpayer may claim a refundable credit against the tax
imposed by this chapter for each person included in the annual
report of a taxpayer that is a certificate owner of a
rehabilitation tax credit certificate issued under section 149.311
of the Revised Code. The credit shall equal twenty-five per cent
of the dollar amount indicated on each certificate, but shall not
exceed five million dollars for each certificate.

The credit shall be claimed for the calendar year specified
in the certificate and in the order required under section 5726.98
of the Revised Code. If the credit exceeds the amount of tax
otherwise due in that year, the excess shall be refunded to the
taxpayer, provided that, if any amount of the credit is refunded,
the sum of the amount refunded and the amount applied to reduce
the tax otherwise due in that year shall not exceed three million
dollars. The taxpayer may carry forward any balance of the credit
in excess of the amount claimed in that year for not more than
five ensuing years, and shall deduct any amount claimed in any
such year from the amount claimed in an ensuing year. A taxpayer
may claim against the tax imposed by this chapter any unused
portion of the credit authorized under section 5725.151 of the
Revised Code, but only to the extent of the five-year carry
forward period authorized by that section.

(C) A taxpayer claiming a credit under this section shall
retain the rehabilitation tax credit certificate for four years
following the end of the year to which the credit was applied, and
shall make the certificate available for inspection by the tax
commissioner upon the request of the commissioner during that
period.

Sec. 5726.53. A taxpayer may claim a refundable credit
against the tax imposed by this chapter for each person included
in the annual report of the taxpayer that was issued a tax credit
certificate by the Ohio venture capital authority under section
150.07 of the Revised Code. The amount of the credit shall equal
the amount specified in the tax credit certificate. The credit
shall be claimed for the tax year specified in the tax credit
certificate. The taxpayer shall claim the credit in the order
required under section 5726.98 of the Revised Code. If the credit
amount exceeds the tax otherwise due under section 5726.02 of the
Revised Code after deducting all other credits preceding the
credit in the order prescribed in section 5726.98 of the Revised
Code, the excess shall be refunded to the taxpayer.

Sec. 5726.54. (A) Any term used in this section has the same
meaning as in section 5725.33 of the Revised Code.

(B) A taxpayer may claim a nonrefundable credit against the
tax imposed by this chapter for each person included in the annual
report of the taxpayer that holds a qualified equity investment on
a credit allowance date occurring in the calendar year immediately
preceding the tax year for which the tax is due. The credit shall
be computed in the same manner prescribed for the computation of
credits allowed under section 5725.33 of the Revised Code.

By claiming a tax credit under this section, a taxpayer
waives its rights under section 5726.20 of the Revised Code with
respect to the time limitation for the assessment of taxes as it
relates to credits claimed under this section that later become
subject to recapture under division (D) of this section.

A taxpayer may claim against the tax imposed by this chapter
any unused portion of the credits authorized under sections
5725.33 and 5733.58 of the Revised Code, but only to the extent of
the remaining carry forward period authorized by those sections.

The credit shall be claimed in the order prescribed by
section 5726.98 of the Revised Code. If the amount of the credit
exceeds the amount of tax otherwise due after deducting all other
credits preceding the credit in the order prescribed in section
5726.98 of the Revised Code, the excess may be carried forward for
not more than four ensuing tax years.

(C) The total amount of qualified equity investments on the
basis of which credits may be claimed under this section and
sections 5725.33, 5729.16, and 5733.58 of the Revised Code is
subject to the limitation of division (C) of section 5725.33 of
the Revised Code.

(D) If any amount of the federal tax credit allowed for a
qualified equity investment for which a credit was received under
this section is recaptured under section 45D of the Internal
Revenue Code, or if the director of development services
determines that an investment for which a tax credit is claimed
under this section is not a qualified equity investment or that
the proceeds of an investment for which a tax credit is claimed
under this section are used to make qualified low-income community
investments other than in a qualified active low-income community
business, all or a portion of the credit received on account of
that investment shall be paid by the taxpayer that received the
credit to the tax commissioner. The amount to be recovered shall
be determined by the director pursuant to rules adopted under
section 5725.33 of the Revised Code. The director shall certify
any amount due under this division to the tax commissioner, and
the commissioner shall notify the taxpayer of the amount due. The
amount due is payable not later than thirty days after the day the
commissioner issues the notice. The amount due shall be considered
to be tax due under section 5726.02 of the Revised Code, and may
be collected by assessment without regard to the limitations
imposed under section 5726.20 of the Revised Code for the
assessment of taxes by the commissioner. All amounts collected
under this division shall be credited as revenue from the tax
levied under section 5726.02 of the Revised Code.

Sec. 5726.55. (A) Any term used in this section has the same
meaning as in section 122.85 of the Revised Code.

(B) A taxpayer may claim a refundable credit against the tax
imposed under this chapter for each person included in the annual
report of the taxpayer that is a certificate owner of a tax credit
certificate issued under section 122.85 of the Revised Code. The
credit shall be claimed for the taxable year in which the
certificate is issued by the director of development services. The
credit amount equals the amount stated in the certificate. The
credit shall be claimed in the order required under section
5726.98 of the Revised Code. If the credit amount exceeds the tax
otherwise due under section 5726.02 of the Revised Code after
deducting all other credits preceding the credit in the order
prescribed in section 5726.98 of the Revised Code, the excess
shall be refunded to the taxpayer.

(C) Nothing in this section shall allow a taxpayer to claim
more than one credit per tax credit-eligible production.

Sec. 5726.56. (A) As used in this section, "qualified
research expenses" has the same meaning as in section 41 of the
Internal Revenue Code.

(B) A taxpayer may claim a nonrefundable credit against the
tax imposed under this chapter equal to seven per cent of the
excess of (1) the qualified research expenses incurred by the
taxpayer in this state in a taxable year over (2) the average
annual qualified research expenses incurred by the taxpayer in
this state in the three previous taxable years. For the purposes
of this division, "qualified research expenses incurred by the
taxpayer" includes the qualified research expenses incurred by all
persons included in the annual report of the taxpayer and by any
insurance company subject to the tax levied under section 5725.18
or Chapter 5729. of the Revised Code that has more than fifty per
cent of its ownership interests directly or indirectly owned or
controlled by a person included in the annual report of the
taxpayer, even though such an insurance company is not subject to
the tax imposed under this chapter.

(C) A taxpayer shall claim the credit allowed under this
section in the order prescribed by section 5726.98 of the Revised
Code. If the amount of the credit exceeds the amount of tax
otherwise due after deducting all other credits preceding the
credit in the order prescribed in section 5726.98 of the Revised
Code, the excess may be carried forward for not more than seven
ensuing tax years. The amount of the excess credit claimed in any
such year shall be deducted from the balance carried forward to
the next tax year.

(D) A taxpayer may claim against the tax imposed under this
chapter any unused portion of a credit authorized under section
5733.351 of the Revised Code but only to the extent of the
remaining portion of the seven-year carry-forward period
authorized by that section.

Sec. 5726.57. (A) As used in this section, "qualifying dealer
in intangibles" means a dealer in intangibles that is a member of
a qualifying controlled group of which a financial institution is
also a member on the first day of the financial institution's tax
year.

(B) For tax year 2014 there is hereby allowed to each
financial institution a nonrefundable credit against the tax
imposed by section 5726.02 of the Revised Code. The amount of the
credit shall be computed in accordance with division (C) of this
section. The credit shall be claimed in the order prescribed by
section 5726.98 of the Revised Code. The credit shall not exceed
the amount of tax otherwise due under section 5726.02 of the
Revised Code after deducting any other credits that precede the
credit claimed under this section in that order.

(C) Subject to division (D) of this section, the amount of
the credit equals the lesser of the amount described in division
(C)(1) of this section or in division (C)(2) of this section.

(1) The amount of tax that a qualifying dealer in intangibles
paid under Chapter 5707. of the Revised Code during the calendar
year immediately preceding the financial institution's tax year.
Such amount shall be reduced, but not below zero, by any refunds
of such tax received by the qualifying dealer in intangibles under
Chapter 5703. of the Revised Code during that calendar year.

(2) The product of the amounts described in divisions
(C)(2)(a) to (c) of this section.

(a) The cost of the financial institution's direct investment
in the capital stock of the qualifying dealer in intangibles
calculated on the last day of the financial institution's taxable
year immediately preceding the tax year;

(b) The ratio described in section 5725.15 of the Revised
Code for the calendar year immediately preceding the financial
institution's tax year;

(c) The tax rate imposed under division (D) of section
5707.03 of the Revised Code for the calendar year immediately
preceding the financial institution's tax year.

(D)(1) The principles and concepts described in section
5733.057 of the Revised Code shall apply in determining whether a
dealer in intangibles is a member of a qualifying controlled group
of which the financial institution also is a member and to
ascertain the cost of the financial institution's direct
investment in the capital stock of the qualifying dealer in
intangibles.

(2) Notwithstanding section 5703.56 of the Revised Code to
the contrary, a financial institution claiming the credit provided
by this section has the burden to establish by a preponderance of
the evidence that the doctrines enumerated in that section would
not apply to deny to the financial institution all or a part of
the credit otherwise provided by this section.

Sec. 5726.98. (A) To provide a uniform procedure for
calculating the amount of tax due under section 5726.02 of the
Revised Code, a taxpayer shall claim any credits to which the
taxpayer is entitled under this chapter in the following order:

(1) The bank organization assessment credit under section
5726.51 of the Revised Code;

(2) The nonrefundable job retention credit under division (B)
of section 5726.50 of the Revised Code;

(3) The nonrefundable credit for purchases of qualified
low-income community investments under section 5726.54 of the
Revised Code;

(4) The nonrefundable credit for qualified research expenses
under section 5726.56 of the Revised Code;

(5) The nonrefundable credit for qualifying dealer in
intangibles taxes under section 5726.57 of the Revised Code.

(6) The refundable credit for rehabilitating an historic
building under section 5726.52 of the Revised Code;

(7) The refundable job retention or job creation credit under
division (A) of section 5726.50 of the Revised Code;

(8) The refundable credit under section 5726.53 of the
Revised Code for losses on loans made under the Ohio venture
capital program under sections 150.01 to 150.10 of the Revised
Code;

(9) The refundable motion picture production credit under
section 5726.55 of the Revised Code.

(B) For any credit except the refundable credits enumerated
in this section, the amount of the credit for a taxable year shall
not exceed the tax due after allowing for any other credit that
precedes it in the order required under this section. Any excess
amount of a particular credit may be carried forward if authorized
under the section creating that credit. Nothing in this chapter
shall be construed to allow a taxpayer to claim, directly or
indirectly, a credit more than once for a taxable year.

Sec. 5726.99. Whoever violates section 5726.41 of the Revised
Code shall be fined not less than one hundred dollars or more than
one thousand dollars.

Sec. 5733.01. (A) The tax provided by this chapter for
domestic corporations shall be the amount charged against each
corporation organized for profit under the laws of this state and
each nonprofit corporation organized pursuant to Chapter 1729. of
the Revised Code, except as provided in sections 5733.09 and
5733.10 of the Revised Code, for the privilege of exercising its
franchise during the calendar year in which that amount is
payable, and the tax provided by this chapter for foreign
corporations shall be the amount charged against each corporation
organized for profit and each nonprofit corporation organized or
operating in the same or similar manner as nonprofit corporations
organized under Chapter 1729. of the Revised Code, under the laws
of any state or country other than this state, except as provided
in sections 5733.09 and 5733.10 of the Revised Code, for the
privilege of doing business in this state, owning or using a part
or all of its capital or property in this state, holding a
certificate of compliance with the laws of this state authorizing
it to do business in this state, or otherwise having nexus in or
with this state under the Constitution of the United States,
during the calendar year in which that amount is payable.

(B) A corporation is subject to the tax imposed by section
5733.06 of the Revised Code for each calendar year prior to 2014
that it is so organized, doing business, owning or using a part or
all of its capital or property, holding a certificate of
compliance, or otherwise having nexus in or with this state under
the Constitution of the United States, on the first day of January
of that calendar year. No credit authorized by this chapter may be
claimed for tax year 2014 or any tax year thereafter.

(C) Any corporation subject to this chapter that is not
subject to the federal income tax shall file its returns and
compute its tax liability as required by this chapter in the same
manner as if that corporation were subject to the federal income
tax.

(D) For purposes of this chapter, a federally chartered
financial institution shall be deemed to be organized under the
laws of the state within which its principal office is located.

(E) For purposes of this chapter, any person, as defined in
section 5701.01 of the Revised Code, shall be treated as a
corporation if the person is classified for federal income tax
purposes as an association taxable as a corporation, and an equity
interest in the person shall be treated as capital stock of the
person.

(F) For the purposes of this chapter, "disregarded entity"
has the same meaning as in division (D) of section 5745.01 of the
Revised Code.

(1) A person's interest in a disregarded entity, whether held
directly or indirectly, shall be treated as the person's ownership
of the assets and liabilities of the disregarded entity, and the
income, including gain or loss, shall be included in the person's
net income under this chapter.

(2) Any sale, exchange, or other disposition of the person's
interest in the disregarded entity, whether held directly or
indirectly, shall be treated as a sale, exchange, or other
disposition of the person's share of the disregarded entity's
underlying assets or liabilities, and the gain or loss from such
sale, exchange, or disposition shall be included in the person's
net income under this chapter.

(3) The disregarded entity's payroll, property, and sales
factors shall be included in the person's factors.

(G) The tax a corporation is required to pay under this
chapter shall be as follows:

(1)(a) For financial institutions, the greater of the minimum
payment required under division (E) of section 5733.06 of the
Revised Code or the difference between all taxes charged the
financial institution under this chapter, without regard to
division (G)(2) of this section, less any credits allowable
against such tax.

(b) A corporation satisfying the description in division
(E)(5), (6), (7), (8), or (10) of section 5751.01 of the Revised
Code, as that section existed before its amendment by H.B. 510 of
the 129th general assembly, that is not a financial institution,
insurance company, or dealer in intangibles is subject to the
taxes imposed under this chapter as a corporation and not subject
to tax as a financial institution, and shall pay the greater of
the minimum payment required under division (E) of section 5733.06
of the Revised Code or the difference between all the taxes
charged under this chapter, without regard to division (G)(2) of
this section, less any credits allowable against such tax.

(2) For all corporations other than those persons described
in division (G)(1)(a) or (b) of this section, the amount under
division (G)(2)(a) of this section applicable to the tax year
specified less the amount under division (G)(2)(b) of this
section:

(a)(i) For tax year 2005, the greater of the minimum payment
required under division (E) of section 5733.06 of the Revised Code
or the difference between all taxes charged the corporation under
this chapter and any credits allowable against such tax;

(ii) For tax year 2006, the greater of the minimum payment
required under division (E) of section 5733.06 of the Revised Code
or four-fifths of the difference between all taxes charged the
corporation under this chapter and any credits allowable against
such tax, except the qualifying pass-through entity tax credit
described in division (A)(30) and the refundable credits described
in divisions (A)(31) to (35) of section 5733.98 of the Revised
Code;

(iii) For tax year 2007, the greater of the minimum payment
required under division (E) of section 5733.06 of the Revised Code
or three-fifths of the difference between all taxes charged the
corporation under this chapter and any credits allowable against
such tax, except the qualifying pass-through entity tax credit
described in division (A)(30) and the refundable credits described
in divisions (A)(31) to (35) of section 5733.98 of the Revised
Code;

(iv) For tax year 2008, the greater of the minimum payment
required under division (E) of section 5733.06 of the Revised Code
or two-fifths of the difference between all taxes charged the
corporation under this chapter and any credits allowable against
such tax, except the qualifying pass-through entity tax credit
described in division (A)(30) and the refundable credits described
in divisions (A)(31) to (35) of section 5733.98 of the Revised
Code;

(v) For tax year 2009, the greater of the minimum payment
required under division (E) of section 5733.06 of the Revised Code
or one-fifth of the difference between all taxes charged the
corporation under this chapter and any credits allowable against
such tax, except the qualifying pass-through entity tax credit
described in division (A)(30) and the refundable credits described
in divisions (A)(31), (32), (33), and (34) of section 5733.98 of
the Revised Code;

(vi) For tax year 2010 and each tax year thereafter, no tax.

(b) A corporation shall subtract from the amount calculated
under division (G)(2)(a)(ii), (iii), (iv), or (v) of this section
any qualifying pass-through entity tax credit described in
division (A)(30) and any refundable credits described in divisions
(A)(31) to (35) of section 5733.98 of the Revised Code to which
the corporation is entitled. Any unused qualifying pass-through
entity tax credit is not refundable.

(c) For the purposes of computing the amount of a credit that
may be carried forward to a subsequent tax year under division
(G)(2) of this section, a credit is utilized against the tax for a
tax year to the extent the credit applies against the tax for that
tax year, even if the difference is then multiplied by the
applicable fraction under division (G)(2)(a) of this section.

(3) Nothing in division (G) of this section eliminates or
reduces the tax imposed by section 5733.41 of the Revised Code on
a qualifying pass-through entity.

Sec. 5733.02. Annually, for tax years prior to tax year
2014, between the first day of January and the thirty-first day of
March or on or before the date as extended under section 5733.13
of the Revised Code, each taxpayer shall make a report in writing
to the tax commissioner in such form as the tax commissioner
prescribes, and shall remit to the commissioner, with the
remittance made payable to the treasurer of state, the amount of
the tax as shown to be due by such report less the amount paid for
the year on a declaration of estimated tax report filed by the
taxpayer as provided by section 5733.021 of the Revised Code.
Remittance shall be made in the form prescribed by the
commissioner, including electronic funds transfer if required by
section 5733.022 of the Revised Code.

The commissioner shall furnish corporations, on request,
copies of the forms prescribed by the commissioner for the purpose
of making such report. A domestic corporation shall not dissolve,
and a foreign corporation shall not withdraw or retire from
business in Ohio, on or after the first day of January in any year
prior to 2014 without making a franchise tax report to the
commissioner and paying or securing the tax charged for the year
in which such dissolution or withdrawal occurs.

The annual corporation report shall be signed by the
president, vice-president, secretary, treasurer, general manager,
superintendent, or managing agent in this state of such
corporation. If a domestic corporation has not completed its
organization, its annual report shall be signed by one of its
incorporators.

The report shall contain the facts, figures, computations,
and attachments that result in the tax charged by this chapter and
determined in the manner provided within the chapter.

Sec. 5733.021. (A) Each taxpayer that does not in January of
any year prior to 2014 file the report and make the payment
required by section 5733.02 of the Revised Code shall make and
file a declaration of estimated tax report for the tax year.

The declaration of estimated tax report shall be filed with
the tax commissioner on or before the last day of January in such
form as prescribed by the tax commissioner, and shall reflect an
estimate of the total amount due under this chapter for the tax
year.

(B) A taxpayer required to file a declaration of estimated
tax report shall make remittance of such estimated tax to the tax
commissioner as follows:

(1) The entire estimated tax at the time of filing the
declaration of estimated tax report, if such estimated tax is not
in excess of the minimum tax as provided in section 5733.06 of the
Revised Code;

(2) If the estimated tax is in excess of the minimum tax:

(a) One-third of the estimated tax at the time of filing the
declaration of estimated tax report;

(b) Two-thirds of the estimated tax on or before the last day
of March of the tax year, if the report required by section
5733.02 of the Revised Code is filed on or before the last day of
March of the tax year.

(3) If the estimated tax is in excess of the minimum tax, and
an extension of time for filing the report required by section
5733.02 of the Revised Code has been granted pursuant to section
5733.13 of the Revised Code:

(a) One-third of the estimated tax at the time of filing the
declaration of estimated tax report;

(b) One-third of the estimated tax on or before the last day
of March of the tax year;

(c) One-third of the estimated tax on or before the last day
of May of the tax year.

Remittance of the estimated tax shall be made payable to the
treasurer of state and shall be made in the form prescribed by the
tax commissioner, including electronic funds transfer if required
by section 5733.022 of the Revised Code.

The tax commissioner shall immediately forward to the
treasurer of state all amounts received under this section, and
the treasurer of state shall credit all payments of such estimated
tax as provided in section 5733.12 of the Revised Code.

(C)(1)(a) For any period of delinquency ending prior to the
first day of June of the tax year, the penalty under division
(A)(2) of section 5733.28 of the Revised Code may be imposed only
on the delinquent portion of the estimated tax required to be paid
under divisions (B)(2)(a) and (b) and (B)(3)(a) and (b) of this
section.

(b) If the taxpayer was not subject to tax for the
immediately preceding tax year, "estimated tax" for purposes of
division (C)(1) of this section is ninety per cent of the
qualifying net tax for the tax year. If the taxpayer was subject
to the tax for the immediately preceding tax year, "estimated tax"
for purposes of division (C)(1) of this section is the lesser of
one hundred per cent of the qualifying net tax for the immediately
preceding tax year or ninety per cent of the qualifying net tax
for the tax year.

(2)(a) For any period of delinquency commencing the first day
of June of the tax year and concluding on the extended due date
pursuant to section 5733.13 of the Revised Code, the penalty under
division (A)(2) of section 5733.28 of the Revised Code may be
imposed only on the delinquent portion of the estimated tax
required to be paid under division (B)(3)(c) of this section.

(b) For purposes of division (C)(2) of this section,
"estimated tax" is ninety per cent of the qualifying net tax for
the tax year.

(3) If the taxpayer did not file a report under section
5733.02 of the Revised Code for the tax year or failed to prepare
and file the report in good faith for the tax year, "qualifying
net tax" as used in division (C) of this section for that tax year
means the amount described in division (C)(3)(a) of this section.
Otherwise, "qualifying net tax" as used in division (C) of this
section for that tax year means the lesser of the amount described
in division (C)(3)(a) or (b) of this section:

(a) The tax imposed by sections 5733.06, 5733.065, and
5733.066 of the Revised Code for that tax year reduced by the
credits listed in section 5733.98 of the Revised Code. If the
credits exceed the total tax, the qualifying net tax is the
minimum tax.

(b) The lesser of the tax shown on the report, prepared and
filed in good faith, reduced by the credits shown on that report,
or the tax shown on an amended report, prepared and filed in good
faith, reduced by the credits shown on that amended report. If the
credits shown exceed the total tax shown, the qualifying net tax
is the minimum tax.

Sec. 5733.06. TheFor tax years prior to tax year 2014, the
tax hereby charged each corporation subject to this chapter shall
be the greater of the sum of divisions (A) and (B) of this
section, after the reduction, if any, provided by division (J) of
this section, or division (C) of this section, after the
reduction, if any, provided by division (J) of this section,
except that the tax hereby charged each financial institution
subject to this chapter shall be the amount computed under
division (D) of this section:

(A) Except as set forth in division (F) of this section, five
and one-tenth per cent upon the first fifty thousand dollars of
the value of the taxpayer's issued and outstanding shares of stock
as determined under division (B) of section 5733.05 of the Revised
Code;

(B) Except as set forth in division (F) of this section,
eight and one-half per cent upon the value so determined in excess
of fifty thousand dollars; or

(C)(1) Except as otherwise provided under division (G) of
this section, four mills times that portion of the value of the
issued and outstanding shares of stock as determined under
division (C) of section 5733.05 of the Revised Code. For the
purposes of division (C) of this section, division (C)(2) of
section 5733.065, and division (C) of section 5733.066 of the
Revised Code, the value of the issued and outstanding shares of
stock of an eligible corporation for tax year 2003 through tax
year 2007, or of a
qualifiedqualifying holding company, is zero.

(2) As used in division (C) of this section, "eligible
corporation" means a person treated as a corporation for federal
income tax purposes that meets all of the following criteria:

(a) The corporation conducts business for an entire taxable
year as a qualified trade or business as defined by division (C)
of section 122.15 of the Revised Code.

(b) The corporation uses more than fifty per cent of the
corporation's assets, based on net book value, that are located in
Ohio solely to conduct activities that constitute a qualified
trade or business as defined by section 122.15 of the Revised
Code.

(c) The corporation has been formed or organized not more
than three years before the report required to be filed by section
5733.02 of the Revised Code is due, without regard to any
extensions.

(d) The corporation is not a related member, as defined in
section 5733.042 of the Revised Code, at any time during the
taxable year with respect to another person treated as a
corporation for federal income tax purposes. A corporation is not
a related member if during the entire taxable year at least
seventy-five per cent of the corporation's stock is owned directly
or through a pass-through entity by individuals, estates, and
grantor trusts, and the individuals, estates, and grantor trusts
do not directly or indirectly own more than twenty per cent of the
value of another person treated as a corporation for federal
income tax purposes that is conducting a qualified trade or
business.

(D) The tax charged each financial institution subject to
this chapter shall be that portion of the value of the issued and
outstanding shares of stock as determined under division (A) of
section 5733.05 of the Revised Code, multiplied by the following
amounts:

(1) For tax years prior to the 1999 tax year, fifteen mills;

(2) For the 1999 tax year, fourteen mills;

(3) For tax year 2000 and thereafter, thirteen mills.

(E) No tax shall be charged from any corporation that has
been adjudicated bankrupt, or for which a receiver has been
appointed, or that has made a general assignment for the benefit
of creditors, except for the portion of the then current tax year
during which the tax commissioner finds such corporation had the
power to exercise its corporate franchise unimpaired by such
proceedings or act. The minimum payment for each corporation shall
be as follows:

(1) One thousand dollars in the case of a corporation having
gross receipts for the taxable year equal to at least five million
dollars from activities within or outside this state or in the
case of a corporation employing at least three hundred employees
at some time during the taxable year within or outside this state;

(2) Fifty dollars in the case of any other corporation.

The tax charged to corporations under this chapter for the
privilege of engaging in business in this state, which is an
excise tax levied on the value of the issued and outstanding
shares of stock, shall in no manner be construed as prohibiting or
otherwise limiting the powers of municipal corporations, joint
economic development zones created under section 715.691 of the
Revised Code, and joint economic development districts created
under section 715.70 or 715.71 or sections 715.72 to 715.81 of the
Revised Code in this state to impose an income tax on the income
of such corporations.

(F) If two or more taxpayers satisfy the ownership or control
requirements of division (A) of section 5733.052 of the Revised
Code, each such taxpayer shall substitute "the taxpayer's pro-rata
amount" for "fifty thousand dollars" in divisions (A) and (B) of
this section. For purposes of this division, "the taxpayer's
pro-rata amount" is an amount that, when added to the other such
taxpayers' pro-rata amounts, does not exceed fifty thousand
dollars. For the purpose of making that computation, the
taxpayer's pro-rata amount shall not be less than zero. Nothing in
this division derogates from or eliminates the requirement to make
the alternative computation of tax under division (C) of this
section.

(G) The tax liability of any corporation under division (C)
of this section shall not exceed one hundred fifty thousand
dollars.

(H)(1) For the purposes of division (H) of this section,
"exiting corporation" means a corporation that satisfies all of
the following conditions:

(a) The corporation had nexus with or in this state under the
Constitution of the United States during any portion of a calendar
year;

(b) The corporation was not a corporation described in
division (A) of section 5733.01 of the Revised Code on the first
day of January immediately following that calendar year;

(c) The corporation was not a financial institution on the
first day of January immediately following that calendar year;

(d) If the corporation was a transferor as defined in section
5733.053 of the Revised Code, the corporation's transferee was not
required to add to the transferee's net income the income of the
transferor pursuant to division (B) of that section;

(e) During any portion of that calendar year, or any portion
of the immediately preceding calendar year, the corporation had
net income that was not included in a report filed by the
corporation or its transferee pursuant to section 5733.02,
5733.021, 5733.03, 5733.031, or 5733.053 of the Revised Code;

(f) The corporation would have been subject to the tax
computed under divisions (A), (B), (C), (F), and (G) of this
section if the corporation is assumed to be a corporation
described in division (A) of section 5733.01 of the Revised Code
on the first day of January immediately following the calendar
year to which division (H)(1)(a) of this section refers.

(2) For the purposes of division (H) of this section,
"unreported net income" means net income that was not previously
included in a report filed pursuant to section 5733.02, 5733.021,
5733.03, 5733.031, or 5733.053 of the Revised Code and that was
realized or recognized during the calendar year to which division
(H)(1) of this section refers or the immediately preceding
calendar year.

(3) Each exiting corporation shall pay a tax computed by
first allocating and apportioning the unreported net income
pursuant to division (B) of section 5733.05 and section 5733.051
and, if applicable, section 5733.052 of the Revised Code. The
exiting corporation then shall compute the tax due on its
unreported net income allocated and apportioned to this state by
applying divisions (A), (B), and (F) of this section to that
income.

(4) Divisions (C) and (G) of this section, division (D)(2) of
section 5733.065, and division (C) of section 5733.066 of the
Revised Code do not apply to an exiting corporation, but exiting
corporations are subject to every other provision of this chapter.

(5) Notwithstanding division (B) of section 5733.01 or
sections 5733.02, 5733.021, and 5733.03 of the Revised Code to the
contrary, each exiting corporation shall report and pay the tax
due under division (H) of this section on or before the
thirty-first day of May immediately following the calendar year to
which division (H)(1)(a) of this section refers. The exiting
corporation shall file that report on the form most recently
prescribed by the tax commissioner for the purposes of complying
with sections 5733.02 and 5733.03 of the Revised Code. Upon
request by the corporation, the tax commissioner may extend the
date for filing the report.

(6) If, on account of the application of section 5733.053 of
the Revised Code, net income is subject to the tax imposed by
divisions (A) and (B) of this section, such income shall not be
subject to the tax imposed by division (H)(3) of this section.

(7) The amendments made to division (H) of this section by
Am. Sub. S.B. 287 of the 123rd general assembly do not apply to
any transfer, as defined in section 5733.053 of the Revised Code,
for which negotiations began prior to January 1, 2001, and that
was commenced in and completed during calendar year 2001, unless
the taxpayer makes an election prior to December 31, 2001, to
apply those amendments.

(8) The tax commissioner may adopt rules governing division
(H) of this section.

(I) Any reference in the Revised Code to "the tax imposed by
section 5733.06 of the Revised Code" or "the tax due under section
5733.06 of the Revised Code" includes the taxes imposed under
sections 5733.065 and 5733.066 of the Revised Code.

(J)(1) Division (J) of this section applies solely to a
combined company. Section 5733.057 of the Revised Code shall apply
when calculating the adjustments required by division (J) of this
section.

(2) Subject to division (J)(4) of this section, the total tax
calculated in divisions (A) and (B) of this section shall be
reduced by an amount calculated by multiplying such tax by a
fraction, the numerator of which is the total taxable gross
receipts attributed to providing public utility activity other
than as an electric company under section 5727.03 of the Revised
Code for the year upon which the taxable gross receipts are
measured immediately preceding the tax year, and the denominator
of which is the total gross receipts from all sources for the year
upon which the taxable gross receipts are measured immediately
preceding the tax year. Nothing herein shall be construed to
exclude from the denominator any item of income described in
section 5733.051 of the Revised Code.

(3) Subject to division (J)(4) of this section, the total tax
calculated in division (C) of this section shall be reduced by an
amount calculated by multiplying such tax by the fraction
described in division (J)(2) of this section.

(4) In no event shall the reduction provided by division
(J)(2) or (J)(3) of this section exceed the amount of the excise
tax paid in accordance with section 5727.38 of the Revised Code,
for the year upon which the taxable gross receipts are measured
immediately preceding the tax year.

Sec. 5747.01. Except as otherwise expressly provided or
clearly appearing from the context, any term used in this chapter
that is not otherwise defined in this section has the same meaning
as when used in a comparable context in the laws of the United
States relating to federal income taxes or if not used in a
comparable context in those laws, has the same meaning as in
section 5733.40 of the Revised Code. Any reference in this chapter
to the Internal Revenue Code includes other laws of the United
States relating to federal income taxes.

As used in this chapter:

(A) "Adjusted gross income" or "Ohio adjusted gross income"
means federal adjusted gross income, as defined and used in the
Internal Revenue Code, adjusted as provided in this section:

(1) Add interest or dividends on obligations or securities of
any state or of any political subdivision or authority of any
state, other than this state and its subdivisions and authorities.

(2) Add interest or dividends on obligations of any
authority, commission, instrumentality, territory, or possession
of the United States to the extent that the interest or dividends
are exempt from federal income taxes but not from state income
taxes.

(3) Deduct interest or dividends on obligations of the United
States and its territories and possessions or of any authority,
commission, or instrumentality of the United States to the extent
that the interest or dividends are included in federal adjusted
gross income but exempt from state income taxes under the laws of
the United States.

(4) Deduct disability and survivor's benefits to the extent
included in federal adjusted gross income.

(5) Deduct benefits under Title II of the Social Security Act
and tier 1 railroad retirement benefits to the extent included in
federal adjusted gross income under section 86 of the Internal
Revenue Code.

(6) In the case of a taxpayer who is a beneficiary of a trust
that makes an accumulation distribution as defined in section 665
of the Internal Revenue Code, add, for the beneficiary's taxable
years beginning before 2002, the portion, if any, of such
distribution that does not exceed the undistributed net income of
the trust for the three taxable years preceding the taxable year
in which the distribution is made to the extent that the portion
was not included in the trust's taxable income for any of the
trust's taxable years beginning in 2002 or thereafter.
"Undistributed net income of a trust" means the taxable income of
the trust increased by (a)(i) the additions to adjusted gross
income required under division (A) of this section and (ii) the
personal exemptions allowed to the trust pursuant to section
642(b) of the Internal Revenue Code, and decreased by (b)(i) the
deductions to adjusted gross income required under division (A) of
this section, (ii) the amount of federal income taxes attributable
to such income, and (iii) the amount of taxable income that has
been included in the adjusted gross income of a beneficiary by
reason of a prior accumulation distribution. Any undistributed net
income included in the adjusted gross income of a beneficiary
shall reduce the undistributed net income of the trust commencing
with the earliest years of the accumulation period.

(7) Deduct the amount of wages and salaries, if any, not
otherwise allowable as a deduction but that would have been
allowable as a deduction in computing federal adjusted gross
income for the taxable year, had the targeted jobs credit allowed
and determined under sections 38, 51, and 52 of the Internal
Revenue Code not been in effect.

(8) Deduct any interest or interest equivalent on public
obligations and purchase obligations to the extent that the
interest or interest equivalent is included in federal adjusted
gross income.

(9) Add any loss or deduct any gain resulting from the sale,
exchange, or other disposition of public obligations to the extent
that the loss has been deducted or the gain has been included in
computing federal adjusted gross income.

(10) Deduct or add amounts, as provided under section 5747.70
of the Revised Code, related to contributions to variable college
savings program accounts made or tuition units purchased pursuant
to Chapter 3334. of the Revised Code.

(11)(a) Deduct, to the extent not otherwise allowable as a
deduction or exclusion in computing federal or Ohio adjusted gross
income for the taxable year, the amount the taxpayer paid during
the taxable year for medical care insurance and qualified
long-term care insurance for the taxpayer, the taxpayer's spouse,
and dependents. No deduction for medical care insurance under
division (A)(11) of this section shall be allowed either to any
taxpayer who is eligible to participate in any subsidized health
plan maintained by any employer of the taxpayer or of the
taxpayer's spouse, or to any taxpayer who is entitled to, or on
application would be entitled to, benefits under part A of Title
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.
301, as amended. For the purposes of division (A)(11)(a) of this
section, "subsidized health plan" means a health plan for which
the employer pays any portion of the plan's cost. The deduction
allowed under division (A)(11)(a) of this section shall be the net
of any related premium refunds, related premium reimbursements, or
related insurance premium dividends received during the taxable
year.

(b) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income during the
taxable year, the amount the taxpayer paid during the taxable
year, not compensated for by any insurance or otherwise, for
medical care of the taxpayer, the taxpayer's spouse, and
dependents, to the extent the expenses exceed seven and one-half
per cent of the taxpayer's federal adjusted gross income.

(c) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income, any amount
included in federal adjusted gross income under section 105 or not
excluded under section 106 of the Internal Revenue Code solely
because it relates to an accident and health plan for a person who
otherwise would be a "qualifying relative" and thus a "dependent"
under section 152 of the Internal Revenue Code but for the fact
that the person fails to meet the income and support limitations
under section 152(d)(1)(B) and (C) of the Internal Revenue Code.

(d) For purposes of division (A)(11) of this section,
"medical care" has the meaning given in section 213 of the
Internal Revenue Code, subject to the special rules, limitations,
and exclusions set forth therein, and "qualified long-term care"
has the same meaning given in section 7702B(c) of the Internal
Revenue Code. Solely for purposes of divisions (A)(11)(a) and (c)
of this section, "dependent" includes a person who otherwise would
be a "qualifying relative" and thus a "dependent" under section
152 of the Internal Revenue Code but for the fact that the person
fails to meet the income and support limitations under section
152(d)(1)(B) and (C) of the Internal Revenue Code.

(12)(a) Deduct any amount included in federal adjusted gross
income solely because the amount represents a reimbursement or
refund of expenses that in any year the taxpayer had deducted as
an itemized deduction pursuant to section 63 of the Internal
Revenue Code and applicable United States department of the
treasury regulations. The deduction otherwise allowed under
division (A)(12)(a) of this section shall be reduced to the extent
the reimbursement is attributable to an amount the taxpayer
deducted under this section in any taxable year.

(b) Add any amount not otherwise included in Ohio adjusted
gross income for any taxable year to the extent that the amount is
attributable to the recovery during the taxable year of any amount
deducted or excluded in computing federal or Ohio adjusted gross
income in any taxable year.

(13) Deduct any portion of the deduction described in section
1341(a)(2) of the Internal Revenue Code, for repaying previously
reported income received under a claim of right, that meets both
of the following requirements:

(a) It is allowable for repayment of an item that was
included in the taxpayer's adjusted gross income for a prior
taxable year and did not qualify for a credit under division (A)
or (B) of section 5747.05 of the Revised Code for that year;

(b) It does not otherwise reduce the taxpayer's adjusted
gross income for the current or any other taxable year.

(14) Deduct an amount equal to the deposits made to, and net
investment earnings of, a medical savings account during the
taxable year, in accordance with section 3924.66 of the Revised
Code. The deduction allowed by division (A)(14) of this section
does not apply to medical savings account deposits and earnings
otherwise deducted or excluded for the current or any other
taxable year from the taxpayer's federal adjusted gross income.

(15)(a) Add an amount equal to the funds withdrawn from a
medical savings account during the taxable year, and the net
investment earnings on those funds, when the funds withdrawn were
used for any purpose other than to reimburse an account holder
for, or to pay, eligible medical expenses, in accordance with
section 3924.66 of the Revised Code;

(b) Add the amounts distributed from a medical savings
account under division (A)(2) of section 3924.68 of the Revised
Code during the taxable year.

(16) Add any amount claimed as a credit under section
5747.059 or 5747.65 of the Revised Code to the extent that such
amount satisfies either of the following:

(a) The amount was deducted or excluded from the computation
of the taxpayer's federal adjusted gross income as required to be
reported for the taxpayer's taxable year under the Internal
Revenue Code;

(b) The amount resulted in a reduction of the taxpayer's
federal adjusted gross income as required to be reported for any
of the taxpayer's taxable years under the Internal Revenue Code.

(17) Deduct the amount contributed by the taxpayer to an
individual development account program established by a county
department of job and family services pursuant to sections 329.11
to 329.14 of the Revised Code for the purpose of matching funds
deposited by program participants. On request of the tax
commissioner, the taxpayer shall provide any information that, in
the tax commissioner's opinion, is necessary to establish the
amount deducted under division (A)(17) of this section.

(18) Beginning in taxable year 2001 but not for any taxable
year beginning after December 31, 2005, if the taxpayer is married
and files a joint return and the combined federal adjusted gross
income of the taxpayer and the taxpayer's spouse for the taxable
year does not exceed one hundred thousand dollars, or if the
taxpayer is single and has a federal adjusted gross income for the
taxable year not exceeding fifty thousand dollars, deduct amounts
paid during the taxable year for qualified tuition and fees paid
to an eligible institution for the taxpayer, the taxpayer's
spouse, or any dependent of the taxpayer, who is a resident of
this state and is enrolled in or attending a program that
culminates in a degree or diploma at an eligible institution. The
deduction may be claimed only to the extent that qualified tuition
and fees are not otherwise deducted or excluded for any taxable
year from federal or Ohio adjusted gross income. The deduction may
not be claimed for educational expenses for which the taxpayer
claims a credit under section 5747.27 of the Revised Code.

(19) Add any reimbursement received during the taxable year
of any amount the taxpayer deducted under division (A)(18) of this
section in any previous taxable year to the extent the amount is
not otherwise included in Ohio adjusted gross income.

(20)(a)(i) Add five-sixths of the amount of depreciation
expense allowed by subsection (k) of section 168 of the Internal
Revenue Code, including the taxpayer's proportionate or
distributive share of the amount of depreciation expense allowed
by that subsection to a pass-through entity in which the taxpayer
has a direct or indirect ownership interest.

(ii) Add five-sixths of the amount of qualifying section 179
depreciation expense, including a person's proportionate or
distributive share of the amount of qualifying section 179
depreciation expense allowed to any pass-through entity in which
the person has a direct or indirect ownership. For the purposes of
this division, "qualifying section 179 depreciation expense" means
the difference between (I) the amount of depreciation expense
directly or indirectly allowed to the taxpayer under section 179
of the Internal Revenue Code, and (II) the amount of depreciation
expense directly or indirectly allowed to the taxpayer under
section 179 of the Internal Revenue Code as that section existed
on December 31, 2002.

The tax commissioner, under procedures established by the
commissioner, may waive the add-backs related to a pass-through
entity if the taxpayer owns, directly or indirectly, less than
five per cent of the pass-through entity.

(b) Nothing in division (A)(20) of this section shall be
construed to adjust or modify the adjusted basis of any asset.

(c) To the extent the add-back required under division
(A)(20)(a) of this section is attributable to property generating
nonbusiness income or loss allocated under section 5747.20 of the
Revised Code, the add-back shall be sitused to the same location
as the nonbusiness income or loss generated by the property for
the purpose of determining the credit under division (A) of
section 5747.05 of the Revised Code. Otherwise, the add-back shall
be apportioned, subject to one or more of the four alternative
methods of apportionment enumerated in section 5747.21 of the
Revised Code.

(d) For the purposes of division (A) of this section, net
operating loss carryback and carryforward shall not include
five-sixths of the allowance of any net operating loss deduction
carryback or carryforward to the taxable year to the extent such
loss resulted from depreciation allowed by section 168(k) of the
Internal Revenue Code and by the qualifying section 179
depreciation expense amount.

(21)(a) If the taxpayer was required to add an amount under
division (A)(20)(a) of this section for a taxable year, deduct
one-fifth of the amount so added for each of the five succeeding
taxable years.

(b) If the amount deducted under division (A)(21)(a) of this
section is attributable to an add-back allocated under division
(A)(20)(c) of this section, the amount deducted shall be sitused
to the same location. Otherwise, the add-back shall be apportioned
using the apportionment factors for the taxable year in which the
deduction is taken, subject to one or more of the four alternative
methods of apportionment enumerated in section 5747.21 of the
Revised Code.

(c) No deduction is available under division (A)(21)(a) of
this section with regard to any depreciation allowed by section
168(k) of the Internal Revenue Code and by the qualifying section
179 depreciation expense amount to the extent that such
depreciation resulted in or increased a federal net operating loss
carryback or carryforward to a taxable year to which division
(A)(20)(d) of this section does not apply.

(22) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income for the taxable
year, the amount the taxpayer received during the taxable year as
reimbursement for life insurance premiums under section 5919.31 of
the Revised Code.

(23) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income for the taxable
year, the amount the taxpayer received during the taxable year as
a death benefit paid by the adjutant general under section 5919.33
of the Revised Code.

(24) Deduct, to the extent included in federal adjusted gross
income and not otherwise allowable as a deduction or exclusion in
computing federal or Ohio adjusted gross income for the taxable
year, military pay and allowances received by the taxpayer during
the taxable year for active duty service in the United States
army, air force, navy, marine corps, or coast guard or reserve
components thereof or the national guard. The deduction may not be
claimed for military pay and allowances received by the taxpayer
while the taxpayer is stationed in this state.

(25) Deduct, to the extent not otherwise allowable as a
deduction or exclusion in computing federal or Ohio adjusted gross
income for the taxable year and not otherwise compensated for by
any other source, the amount of qualified organ donation expenses
incurred by the taxpayer during the taxable year, not to exceed
ten thousand dollars. A taxpayer may deduct qualified organ
donation expenses only once for all taxable years beginning with
taxable years beginning in 2007.

For the purposes of division (A)(25) of this section:

(a) "Human organ" means all or any portion of a human liver,
pancreas, kidney, intestine, or lung, and any portion of human
bone marrow.

(b) "Qualified organ donation expenses" means travel
expenses, lodging expenses, and wages and salary forgone by a
taxpayer in connection with the taxpayer's donation, while living,
of one or more of the taxpayer's human organs to another human
being.

(26) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income for the taxable
year, amounts received by the taxpayer as retired military
personnel pay for service in the United States army, navy, air
force, coast guard, or marine corps or reserve components thereof,
or the national guard, or received by the surviving spouse or
former spouse of such a taxpayer under the survivor benefit plan
on account of such a taxpayer's death. If the taxpayer receives
income on account of retirement paid under the federal civil
service retirement system or federal employees retirement system,
or under any successor retirement program enacted by the congress
of the United States that is established and maintained for
retired employees of the United States government, and such
retirement income is based, in whole or in part, on credit for the
taxpayer's military service, the deduction allowed under this
division shall include only that portion of such retirement income
that is attributable to the taxpayer's military service, to the
extent that portion of such retirement income is otherwise
included in federal adjusted gross income and is not otherwise
deducted under this section. Any amount deducted under division
(A)(26) of this section is not included in a taxpayer's adjusted
gross income for the purposes of section 5747.055 of the Revised
Code. No amount may be deducted under division (A)(26) of this
section on the basis of which a credit was claimed under section
5747.055 of the Revised Code.

(27) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income for the taxable
year, the amount the taxpayer received during the taxable year
from the military injury relief fund created in section 5101.98 of
the Revised Code.

(28) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income for the taxable
year, the amount the taxpayer received as a veterans bonus during
the taxable year from the Ohio department of veterans services as
authorized by Section 2r of Article VIII, Ohio Constitution.

(29) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income for the taxable
year, any loss from wagering transactions that is allowed as an
itemized deduction under section 165 of the Internal Revenue Code
and that the taxpayer deducted in computing federal taxable
income.

(30) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income for the taxable
year, any income derived from providing public services under a
contract through a project owned by the state, as described in
section 126.604 of the Revised Code or derived from a transfer
agreement or from the enterprise transferred under that agreement
under section 4313.02 of the Revised Code.

(31) Deduct, to the extent not otherwise deducted or excluded
in computing federal or Ohio adjusted gross income for the taxable
year, Ohio college opportunity or federal Pell grant amounts
received by the taxpayer or the taxpayer's spouse or dependent
pursuant to section 3333.122 of the Revised Code or 20 U.S.C.
1070a, et seq., and used to pay room or board furnished by the
educational institution for which the grant was awarded at the
institution's facilities, including meal plans administered by the
institution. For the purposes of this division, receipt of a grant
includes the distribution of a grant directly to an educational
institution and the crediting of the grant to the enrollee's
account with the institution.

(B) "Business income" means income, including gain or loss,
arising from transactions, activities, and sources in the regular
course of a trade or business and includes income, gain, or loss
from real property, tangible property, and intangible property if
the acquisition, rental, management, and disposition of the
property constitute integral parts of the regular course of a
trade or business operation. "Business income" includes income,
including gain or loss, from a partial or complete liquidation of
a business, including, but not limited to, gain or loss from the
sale or other disposition of goodwill.

(C) "Nonbusiness income" means all income other than business
income and may include, but is not limited to, compensation, rents
and royalties from real or tangible personal property, capital
gains, interest, dividends and distributions, patent or copyright
royalties, or lottery winnings, prizes, and awards.

(D) "Compensation" means any form of remuneration paid to an
employee for personal services.

(E) "Fiduciary" means a guardian, trustee, executor,
administrator, receiver, conservator, or any other person acting
in any fiduciary capacity for any individual, trust, or estate.

(F) "Fiscal year" means an accounting period of twelve months
ending on the last day of any month other than December.

(I) "Resident" means any of the following, provided that
division (I)(3) of this section applies only to taxable years of a
trust beginning in 2002 or thereafter:

(1) An individual who is domiciled in this state, subject to
section 5747.24 of the Revised Code;

(2) The estate of a decedent who at the time of death was
domiciled in this state. The domicile tests of section 5747.24 of
the Revised Code are not controlling for purposes of division
(I)(2) of this section.

(3) A trust that, in whole or part, resides in this state. If
only part of a trust resides in this state, the trust is a
resident only with respect to that part.

For the purposes of division (I)(3) of this section:

(a) A trust resides in this state for the trust's current
taxable year to the extent, as described in division (I)(3)(d) of
this section, that the trust consists directly or indirectly, in
whole or in part, of assets, net of any related liabilities, that
were transferred, or caused to be transferred, directly or
indirectly, to the trust by any of the following:

(i) A person, a court, or a governmental entity or
instrumentality on account of the death of a decedent, but only if
the trust is described in division (I)(3)(e)(i) or (ii) of this
section;

(ii) A person who was domiciled in this state for the
purposes of this chapter when the person directly or indirectly
transferred assets to an irrevocable trust, but only if at least
one of the trust's qualifying beneficiaries is domiciled in this
state for the purposes of this chapter during all or some portion
of the trust's current taxable year;

(iii) A person who was domiciled in this state for the
purposes of this chapter when the trust document or instrument or
part of the trust document or instrument became irrevocable, but
only if at least one of the trust's qualifying beneficiaries is a
resident domiciled in this state for the purposes of this chapter
during all or some portion of the trust's current taxable year. If
a trust document or instrument became irrevocable upon the death
of a person who at the time of death was domiciled in this state
for purposes of this chapter, that person is a person described in
division (I)(3)(a)(iii) of this section.

(b) A trust is irrevocable to the extent that the transferor
is not considered to be the owner of the net assets of the trust
under sections 671 to 678 of the Internal Revenue Code.

(c) With respect to a trust other than a charitable lead
trust, "qualifying beneficiary" has the same meaning as "potential
current beneficiary" as defined in section 1361(e)(2) of the
Internal Revenue Code, and with respect to a charitable lead trust
"qualifying beneficiary" is any current, future, or contingent
beneficiary, but with respect to any trust "qualifying
beneficiary" excludes a person or a governmental entity or
instrumentality to any of which a contribution would qualify for
the charitable deduction under section 170 of the Internal Revenue
Code.

(d) For the purposes of division (I)(3)(a) of this section,
the extent to which a trust consists directly or indirectly, in
whole or in part, of assets, net of any related liabilities, that
were transferred directly or indirectly, in whole or part, to the
trust by any of the sources enumerated in that division shall be
ascertained by multiplying the fair market value of the trust's
assets, net of related liabilities, by the qualifying ratio, which
shall be computed as follows:

(i) The first time the trust receives assets, the numerator
of the qualifying ratio is the fair market value of those assets
at that time, net of any related liabilities, from sources
enumerated in division (I)(3)(a) of this section. The denominator
of the qualifying ratio is the fair market value of all the
trust's assets at that time, net of any related liabilities.

(ii) Each subsequent time the trust receives assets, a
revised qualifying ratio shall be computed. The numerator of the
revised qualifying ratio is the sum of (1) the fair market value
of the trust's assets immediately prior to the subsequent
transfer, net of any related liabilities, multiplied by the
qualifying ratio last computed without regard to the subsequent
transfer, and (2) the fair market value of the subsequently
transferred assets at the time transferred, net of any related
liabilities, from sources enumerated in division (I)(3)(a) of this
section. The denominator of the revised qualifying ratio is the
fair market value of all the trust's assets immediately after the
subsequent transfer, net of any related liabilities.

(iii) Whether a transfer to the trust is by or from any of
the sources enumerated in division (I)(3)(a) of this section shall
be ascertained without regard to the domicile of the trust's
beneficiaries.

(e) For the purposes of division (I)(3)(a)(i) of this
section:

(i) A trust is described in division (I)(3)(e)(i) of this
section if the trust is a testamentary trust and the testator of
that testamentary trust was domiciled in this state at the time of
the testator's death for purposes of the taxes levied under
Chapter 5731. of the Revised Code.

(ii) A trust is described in division (I)(3)(e)(ii) of this
section if the transfer is a qualifying transfer described in any
of divisions (I)(3)(f)(i) to (vi) of this section, the trust is an
irrevocable inter vivos trust, and at least one of the trust's
qualifying beneficiaries is domiciled in this state for purposes
of this chapter during all or some portion of the trust's current
taxable year.

(f) For the purposes of division (I)(3)(e)(ii) of this
section, a "qualifying transfer" is a transfer of assets, net of
any related liabilities, directly or indirectly to a trust, if the
transfer is described in any of the following:

(i) The transfer is made to a trust, created by the decedent
before the decedent's death and while the decedent was domiciled
in this state for the purposes of this chapter, and, prior to the
death of the decedent, the trust became irrevocable while the
decedent was domiciled in this state for the purposes of this
chapter.

(ii) The transfer is made to a trust to which the decedent,
prior to the decedent's death, had directly or indirectly
transferred assets, net of any related liabilities, while the
decedent was domiciled in this state for the purposes of this
chapter, and prior to the death of the decedent the trust became
irrevocable while the decedent was domiciled in this state for the
purposes of this chapter.

(iii) The transfer is made on account of a contractual
relationship existing directly or indirectly between the
transferor and either the decedent or the estate of the decedent
at any time prior to the date of the decedent's death, and the
decedent was domiciled in this state at the time of death for
purposes of the taxes levied under Chapter 5731. of the Revised
Code.

(iv) The transfer is made to a trust on account of a
contractual relationship existing directly or indirectly between
the transferor and another person who at the time of the
decedent's death was domiciled in this state for purposes of this
chapter.

(v) The transfer is made to a trust on account of the will of
a testator who was domiciled in this state at the time of the
testator's death for purposes of the taxes levied under Chapter
5731. of the Revised Code.

(vi) The transfer is made to a trust created by or caused to
be created by a court, and the trust was directly or indirectly
created in connection with or as a result of the death of an
individual who, for purposes of the taxes levied under Chapter
5731. of the Revised Code, was domiciled in this state at the time
of the individual's death.

(g) The tax commissioner may adopt rules to ascertain the
part of a trust residing in this state.

(J) "Nonresident" means an individual or estate that is not a
resident. An individual who is a resident for only part of a
taxable year is a nonresident for the remainder of that taxable
year.

(K) "Pass-through entity" has the same meaning as in section
5733.04 of the Revised Code.

(L) "Return" means the notifications and reports required to
be filed pursuant to this chapter for the purpose of reporting the
tax due and includes declarations of estimated tax when so
required.

(M) "Taxable year" means the calendar year or the taxpayer's
fiscal year ending during the calendar year, or fractional part
thereof, upon which the adjusted gross income is calculated
pursuant to this chapter.

(N) "Taxpayer" means any person subject to the tax imposed by
section 5747.02 of the Revised Code or any pass-through entity
that makes the election under division (D) of section 5747.08 of
the Revised Code.

(O) "Dependents" means dependents as defined in the Internal
Revenue Code and as claimed in the taxpayer's federal income tax
return for the taxable year or which the taxpayer would have been
permitted to claim had the taxpayer filed a federal income tax
return.

(P) "Principal county of employment" means, in the case of a
nonresident, the county within the state in which a taxpayer
performs services for an employer or, if those services are
performed in more than one county, the county in which the major
portion of the services are performed.

(2) "Essential local government purposes" includes all
functions that any subdivision is required by general law to
exercise, including like functions that are exercised under a
charter adopted pursuant to the Ohio Constitution.

(R) "Overpayment" means any amount already paid that exceeds
the figure determined to be the correct amount of the tax.

(S) "Taxable income" or "Ohio taxable income" applies only to
estates and trusts, and means federal taxable income, as defined
and used in the Internal Revenue Code, adjusted as follows:

(1) Add interest or dividends, net of ordinary, necessary,
and reasonable expenses not deducted in computing federal taxable
income, on obligations or securities of any state or of any
political subdivision or authority of any state, other than this
state and its subdivisions and authorities, but only to the extent
that such net amount is not otherwise includible in Ohio taxable
income and is described in either division (S)(1)(a) or (b) of
this section:

(a) The net amount is not attributable to the S portion of an
electing small business trust and has not been distributed to
beneficiaries for the taxable year;

(b) The net amount is attributable to the S portion of an
electing small business trust for the taxable year.

(2) Add interest or dividends, net of ordinary, necessary,
and reasonable expenses not deducted in computing federal taxable
income, on obligations of any authority, commission,
instrumentality, territory, or possession of the United States to
the extent that the interest or dividends are exempt from federal
income taxes but not from state income taxes, but only to the
extent that such net amount is not otherwise includible in Ohio
taxable income and is described in either division (S)(1)(a) or
(b) of this section;

(3) Add the amount of personal exemption allowed to the
estate pursuant to section 642(b) of the Internal Revenue Code;

(4) Deduct interest or dividends, net of related expenses
deducted in computing federal taxable income, on obligations of
the United States and its territories and possessions or of any
authority, commission, or instrumentality of the United States to
the extent that the interest or dividends are exempt from state
taxes under the laws of the United States, but only to the extent
that such amount is included in federal taxable income and is
described in either division (S)(1)(a) or (b) of this section;

(5) Deduct the amount of wages and salaries, if any, not
otherwise allowable as a deduction but that would have been
allowable as a deduction in computing federal taxable income for
the taxable year, had the targeted jobs credit allowed under
sections 38, 51, and 52 of the Internal Revenue Code not been in
effect, but only to the extent such amount relates either to
income included in federal taxable income for the taxable year or
to income of the S portion of an electing small business trust for
the taxable year;

(6) Deduct any interest or interest equivalent, net of
related expenses deducted in computing federal taxable income, on
public obligations and purchase obligations, but only to the
extent that such net amount relates either to income included in
federal taxable income for the taxable year or to income of the S
portion of an electing small business trust for the taxable year;

(7) Add any loss or deduct any gain resulting from sale,
exchange, or other disposition of public obligations to the extent
that such loss has been deducted or such gain has been included in
computing either federal taxable income or income of the S portion
of an electing small business trust for the taxable year;

(8) Except in the case of the final return of an estate, add
any amount deducted by the taxpayer on both its Ohio estate tax
return pursuant to section 5731.14 of the Revised Code, and on its
federal income tax return in determining federal taxable income;

(9)(a) Deduct any amount included in federal taxable income
solely because the amount represents a reimbursement or refund of
expenses that in a previous year the decedent had deducted as an
itemized deduction pursuant to section 63 of the Internal Revenue
Code and applicable treasury regulations. The deduction otherwise
allowed under division (S)(9)(a) of this section shall be reduced
to the extent the reimbursement is attributable to an amount the
taxpayer or decedent deducted under this section in any taxable
year.

(b) Add any amount not otherwise included in Ohio taxable
income for any taxable year to the extent that the amount is
attributable to the recovery during the taxable year of any amount
deducted or excluded in computing federal or Ohio taxable income
in any taxable year, but only to the extent such amount has not
been distributed to beneficiaries for the taxable year.

(10) Deduct any portion of the deduction described in section
1341(a)(2) of the Internal Revenue Code, for repaying previously
reported income received under a claim of right, that meets both
of the following requirements:

(a) It is allowable for repayment of an item that was
included in the taxpayer's taxable income or the decedent's
adjusted gross income for a prior taxable year and did not qualify
for a credit under division (A) or (B) of section 5747.05 of the
Revised Code for that year.

(b) It does not otherwise reduce the taxpayer's taxable
income or the decedent's adjusted gross income for the current or
any other taxable year.

(11) Add any amount claimed as a credit under section
5747.059 or 5747.65 of the Revised Code to the extent that the
amount satisfies either of the following:

(a) The amount was deducted or excluded from the computation
of the taxpayer's federal taxable income as required to be
reported for the taxpayer's taxable year under the Internal
Revenue Code;

(b) The amount resulted in a reduction in the taxpayer's
federal taxable income as required to be reported for any of the
taxpayer's taxable years under the Internal Revenue Code.

(12) Deduct any amount, net of related expenses deducted in
computing federal taxable income, that a trust is required to
report as farm income on its federal income tax return, but only
if the assets of the trust include at least ten acres of land
satisfying the definition of "land devoted exclusively to
agricultural use" under section 5713.30 of the Revised Code,
regardless of whether the land is valued for tax purposes as such
land under sections 5713.30 to 5713.38 of the Revised Code. If the
trust is a pass-through entity investor, section 5747.231 of the
Revised Code applies in ascertaining if the trust is eligible to
claim the deduction provided by division (S)(12) of this section
in connection with the pass-through entity's farm income.

Except for farm income attributable to the S portion of an
electing small business trust, the deduction provided by division
(S)(12) of this section is allowed only to the extent that the
trust has not distributed such farm income. Division (S)(12) of
this section applies only to taxable years of a trust beginning in
2002 or thereafter.

(13) Add the net amount of income described in section 641(c)
of the Internal Revenue Code to the extent that amount is not
included in federal taxable income.

(14) Add or deduct the amount the taxpayer would be required
to add or deduct under division (A)(20) or (21) of this section if
the taxpayer's Ohio taxable income were computed in the same
manner as an individual's Ohio adjusted gross income is computed
under this section. In the case of a trust, division (S)(14) of
this section applies only to any of the trust's taxable years
beginning in 2002 or thereafter.

(T) "School district income" and "school district income tax"
have the same meanings as in section 5748.01 of the Revised Code.

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7)
of this section, "public obligations," "purchase obligations," and
"interest or interest equivalent" have the same meanings as in
section 5709.76 of the Revised Code.

(V) "Limited liability company" means any limited liability
company formed under Chapter 1705. of the Revised Code or under
the laws of any other state.

(W) "Pass-through entity investor" means any person who,
during any portion of a taxable year of a pass-through entity, is
a partner, member, shareholder, or equity investor in that
pass-through entity.

(X) "Banking day" has the same meaning as in section 1304.01
of the Revised Code.

(Y) "Month" means a calendar month.

(Z) "Quarter" means the first three months, the second three
months, the third three months, or the last three months of the
taxpayer's taxable year.

(AA)(1) "Eligible institution" means a state university or
state institution of higher education as defined in section
3345.011 of the Revised Code, or a private, nonprofit college,
university, or other post-secondary institution located in this
state that possesses a certificate of authorization issued by the
Ohio board of regents pursuant to Chapter 1713. of the Revised
Code or a certificate of registration issued by the state board of
career colleges and schools under Chapter 3332. of the Revised
Code.

(2) "Qualified tuition and fees" means tuition and fees
imposed by an eligible institution as a condition of enrollment or
attendance, not exceeding two thousand five hundred dollars in
each of the individual's first two years of post-secondary
education. If the individual is a part-time student, "qualified
tuition and fees" includes tuition and fees paid for the academic
equivalent of the first two years of post-secondary education
during a maximum of five taxable years, not exceeding a total of
five thousand dollars. "Qualified tuition and fees" does not
include:

(a) Expenses for any course or activity involving sports,
games, or hobbies unless the course or activity is part of the
individual's degree or diploma program;

(b) The cost of books, room and board, student activity fees,
athletic fees, insurance expenses, or other expenses unrelated to
the individual's academic course of instruction;

(c) Tuition, fees, or other expenses paid or reimbursed
through an employer, scholarship, grant in aid, or other
educational benefit program.

(BB)(1) "Modified business income" means the business income
included in a trust's Ohio taxable income after such taxable
income is first reduced by the qualifying trust amount, if any.

(2) "Qualifying trust amount" of a trust means capital gains
and losses from the sale, exchange, or other disposition of equity
or ownership interests in, or debt obligations of, a qualifying
investee to the extent included in the trust's Ohio taxable
income, but only if the following requirements are satisfied:

(a) The book value of the qualifying investee's physical
assets in this state and everywhere, as of the last day of the
qualifying investee's fiscal or calendar year ending immediately
prior to the date on which the trust recognizes the gain or loss,
is available to the trust.

(b) The requirements of section 5747.011 of the Revised Code
are satisfied for the trust's taxable year in which the trust
recognizes the gain or loss.

Any gain or loss that is not a qualifying trust amount is
modified business income, qualifying investment income, or
modified nonbusiness income, as the case may be.

(3) "Modified nonbusiness income" means a trust's Ohio
taxable income other than modified business income, other than the
qualifying trust amount, and other than qualifying investment
income, as defined in section 5747.012 of the Revised Code, to the
extent such qualifying investment income is not otherwise part of
modified business income.

(4) "Modified Ohio taxable income" applies only to trusts,
and means the sum of the amounts described in divisions (BB)(4)(a)
to (c) of this section:

(a) The fraction, calculated under section 5747.013, and
applying section 5747.231 of the Revised Code, multiplied by the
sum of the following amounts:

(i) The trust's modified business income;

(ii) The trust's qualifying investment income, as defined in
section 5747.012 of the Revised Code, but only to the extent the
qualifying investment income does not otherwise constitute
modified business income and does not otherwise constitute a
qualifying trust amount.

(b) The qualifying trust amount multiplied by a fraction, the
numerator of which is the sum of the book value of the qualifying
investee's physical assets in this state on the last day of the
qualifying investee's fiscal or calendar year ending immediately
prior to the day on which the trust recognizes the qualifying
trust amount, and the denominator of which is the sum of the book
value of the qualifying investee's total physical assets
everywhere on the last day of the qualifying investee's fiscal or
calendar year ending immediately prior to the day on which the
trust recognizes the qualifying trust amount. If, for a taxable
year, the trust recognizes a qualifying trust amount with respect
to more than one qualifying investee, the amount described in
division (BB)(4)(b) of this section shall equal the sum of the
products so computed for each such qualifying investee.

(c)(i) With respect to a trust or portion of a trust that is
a resident as ascertained in accordance with division (I)(3)(d) of
this section, its modified nonbusiness income.

(ii) With respect to a trust or portion of a trust that is
not a resident as ascertained in accordance with division
(I)(3)(d) of this section, the amount of its modified nonbusiness
income satisfying the descriptions in divisions (B)(2) to (5) of
section 5747.20 of the Revised Code, except as otherwise provided
in division (BB)(4)(c)(ii) of this section. With respect to a
trust or portion of a trust that is not a resident as ascertained
in accordance with division (I)(3)(d) of this section, the trust's
portion of modified nonbusiness income recognized from the sale,
exchange, or other disposition of a debt interest in or equity
interest in a section 5747.212 entity, as defined in section
5747.212 of the Revised Code, without regard to division (A) of
that section, shall not be allocated to this state in accordance
with section 5747.20 of the Revised Code but shall be apportioned
to this state in accordance with division (B) of section 5747.212
of the Revised Code without regard to division (A) of that
section.

If the allocation and apportionment of a trust's income under
divisions (BB)(4)(a) and (c) of this section do not fairly
represent the modified Ohio taxable income of the trust in this
state, the alternative methods described in division (C) of
section 5747.21 of the Revised Code may be applied in the manner
and to the same extent provided in that section.

(5)(a) Except as set forth in division (BB)(5)(b) of this
section, "qualifying investee" means a person in which a trust has
an equity or ownership interest, or a person or unit of government
the debt obligations of either of which are owned by a trust. For
the purposes of division (BB)(2)(a) of this section and for the
purpose of computing the fraction described in division (BB)(4)(b)
of this section, all of the following apply:

(i) If the qualifying investee is a member of a qualifying
controlled group on the last day of the qualifying investee's
fiscal or calendar year ending immediately prior to the date on
which the trust recognizes the gain or loss, then "qualifying
investee" includes all persons in the qualifying controlled group
on such last day.

(ii) If the qualifying investee, or if the qualifying
investee and any members of the qualifying controlled group of
which the qualifying investee is a member on the last day of the
qualifying investee's fiscal or calendar year ending immediately
prior to the date on which the trust recognizes the gain or loss,
separately or cumulatively own, directly or indirectly, on the
last day of the qualifying investee's fiscal or calendar year
ending immediately prior to the date on which the trust recognizes
the qualifying trust amount, more than fifty per cent of the
equity of a pass-through entity, then the qualifying investee and
the other members are deemed to own the proportionate share of the
pass-through entity's physical assets which the pass-through
entity directly or indirectly owns on the last day of the
pass-through entity's calendar or fiscal year ending within or
with the last day of the qualifying investee's fiscal or calendar
year ending immediately prior to the date on which the trust
recognizes the qualifying trust amount.

(iii) For the purposes of division (BB)(5)(a)(iii) of this
section, "upper level pass-through entity" means a pass-through
entity directly or indirectly owning any equity of another
pass-through entity, and "lower level pass-through entity" means
that other pass-through entity.

An upper level pass-through entity, whether or not it is also
a qualifying investee, is deemed to own, on the last day of the
upper level pass-through entity's calendar or fiscal year, the
proportionate share of the lower level pass-through entity's
physical assets that the lower level pass-through entity directly
or indirectly owns on the last day of the lower level pass-through
entity's calendar or fiscal year ending within or with the last
day of the upper level pass-through entity's fiscal or calendar
year. If the upper level pass-through entity directly and
indirectly owns less than fifty per cent of the equity of the
lower level pass-through entity on each day of the upper level
pass-through entity's calendar or fiscal year in which or with
which ends the calendar or fiscal year of the lower level
pass-through entity and if, based upon clear and convincing
evidence, complete information about the location and cost of the
physical assets of the lower pass-through entity is not available
to the upper level pass-through entity, then solely for purposes
of ascertaining if a gain or loss constitutes a qualifying trust
amount, the upper level pass-through entity shall be deemed as
owning no equity of the lower level pass-through entity for each
day during the upper level pass-through entity's calendar or
fiscal year in which or with which ends the lower level
pass-through entity's calendar or fiscal year. Nothing in division
(BB)(5)(a)(iii) of this section shall be construed to provide for
any deduction or exclusion in computing any trust's Ohio taxable
income.

(b) With respect to a trust that is not a resident for the
taxable year and with respect to a part of a trust that is not a
resident for the taxable year, "qualifying investee" for that
taxable year does not include a C corporation if both of the
following apply:

(i) During the taxable year the trust or part of the trust
recognizes a gain or loss from the sale, exchange, or other
disposition of equity or ownership interests in, or debt
obligations of, the C corporation.

(ii) Such gain or loss constitutes nonbusiness income.

(6) "Available" means information is such that a person is
able to learn of the information by the due date plus extensions,
if any, for filing the return for the taxable year in which the
trust recognizes the gain or loss.

(CC) "Qualifying controlled group" has the same meaning as in
section 5733.04 of the Revised Code.

(DD) "Related member" has the same meaning as in section
5733.042 of the Revised Code.

(EE)(1) For the purposes of division (EE) of this section:

(a) "Qualifying person" means any person other than a
qualifying corporation.

(b) "Qualifying corporation" means any person classified for
federal income tax purposes as an association taxable as a
corporation, except either of the following:

(i) A corporation that has made an election under subchapter
S, chapter one, subtitle A, of the Internal Revenue Code for its
taxable year ending within, or on the last day of, the investor's
taxable year;

(ii) A subsidiary that is wholly owned by any corporation
that has made an election under subchapter S, chapter one,
subtitle A of the Internal Revenue Code for its taxable year
ending within, or on the last day of, the investor's taxable year.

(2) For the purposes of this chapter, unless expressly stated
otherwise, no qualifying person indirectly owns any asset directly
or indirectly owned by any qualifying corporation.

(FF) For purposes of this chapter and Chapter 5751. of the
Revised Code:

(1) "Trust" does not include a qualified pre-income tax
trust.

(2) A "qualified pre-income tax trust" is any pre-income tax
trust that makes a qualifying pre-income tax trust election as
described in division (FF)(3) of this section.

(3) A "qualifying pre-income tax trust election" is an
election by a pre-income tax trust to subject to the tax imposed
by section 5751.02 of the Revised Code the pre-income tax trust
and all pass-through entities of which the trust owns or controls,
directly, indirectly, or constructively through related interests,
five per cent or more of the ownership or equity interests. The
trustee shall notify the tax commissioner in writing of the
election on or before April 15, 2006. The election, if timely
made, shall be effective on and after January 1, 2006, and shall
apply for all tax periods and tax years until revoked by the
trustee of the trust.

(4) A "pre-income tax trust" is a trust that satisfies all of
the following requirements:

(a) The document or instrument creating the trust was
executed by the grantor before January 1, 1972;

(b) The trust became irrevocable upon the creation of the
trust; and

(c) The grantor was domiciled in this state at the time the
trust was created.

Sec. 5747.65. There is hereby allowed a refundable credit
against the tax imposed under section 5747.02 of the Revised Code.
The amount of the credit shall equal the taxpayer's proportionate
share of the lesser of either the tax due or the tax paid for the
tax imposed by section 5726.02 of the Revised Code by a
pass-through entity for the pass-through entity's taxable year
ending in the taxpayer's taxable year.

The taxpayer shall claim the credit for the taxpayer's
taxable year that includes the last day of the pass-through
entity's taxable year. For purposes of making tax payments under
this chapter, taxes equal to the amount of the credit shall be
considered to be paid by the taxpayer on the day the pass-through
entity pays to the treasurer of state the amount due for the tax
imposed by section 5726.02 of the Revised Code.

In claiming the credit and determining the taxpayer's
proportionate share of the tax due and the tax paid by a
pass-through entity, the taxpayer shall follow the concepts set
forth in subchapters J and K of the Internal Revenue Code.

The credit shall be claimed in the order required under
section 5747.98 of the Revised Code. If the amount of the credit
exceeds the amount of tax otherwise due under section 5747.02 of
the Revised Code after deduction of all other credits in that
order, the taxpayer is entitled to a refund of the excess.

Sec. 5747.98. (A) To provide a uniform procedure for
calculating the amount of tax due under section 5747.02 of the
Revised Code, a taxpayer shall claim any credits to which the
taxpayer is entitled in the following order:

(1) The retirement income credit under division (B) of
section 5747.055 of the Revised Code;

(2) The senior citizen credit under division (C) of section
5747.05 of the Revised Code;

(3) The lump sum distribution credit under division (D) of
section 5747.05 of the Revised Code;

(4) The dependent care credit under section 5747.054 of the
Revised Code;

(5) The lump sum retirement income credit under division (C)
of section 5747.055 of the Revised Code;

(6) The lump sum retirement income credit under division (D)
of section 5747.055 of the Revised Code;

(7) The lump sum retirement income credit under division (E)
of section 5747.055 of the Revised Code;

(8) The low-income credit under section 5747.056 of the
Revised Code;

(9) The credit for displaced workers who pay for job training
under section 5747.27 of the Revised Code;

(10) The campaign contribution credit under section 5747.29
of the Revised Code;

(11) The twenty-dollar personal exemption credit under
section 5747.022 of the Revised Code;

(12) The joint filing credit under division (G) of section
5747.05 of the Revised Code;

(13) The nonresident credit under division (A) of section
5747.05 of the Revised Code;

(14) The credit for a resident's out-of-state income under
division (B) of section 5747.05 of the Revised Code;

(15) The credit for employers that enter into agreements with
child day-care centers under section 5747.34 of the Revised Code;

(16) The credit for employers that reimburse employee child
care expenses under section 5747.36 of the Revised Code;

(17) The credit for adoption of a minor child under section
5747.37 of the Revised Code;

(18) The credit for purchases of lights and reflectors under
section 5747.38 of the Revised Code;

(19) The nonrefundable job retention credit under division
(B) of section 5747.058 of the Revised Code;

(20) The credit for selling alternative fuel under section
5747.77 of the Revised Code;

(21) The second credit for purchases of new manufacturing
machinery and equipment and the credit for using Ohio coal under
section 5747.31 of the Revised Code;

(22) The job training credit under section 5747.39 of the
Revised Code;

(23) The enterprise zone credit under section 5709.66 of the
Revised Code;

(24) The credit for the eligible costs associated with a
voluntary action under section 5747.32 of the Revised Code;

(25) The credit for employers that establish on-site child
day-care centers under section 5747.35 of the Revised Code;

(26) The ethanol plant investment credit under section
5747.75 of the Revised Code;

(27) The credit for purchases of qualifying grape production
property under section 5747.28 of the Revised Code;

(28) The small business investment credit under section
5747.81 of the Revised Code;

(29) The credit for research and development and technology
transfer investors under section 5747.33 of the Revised Code;

(30) The enterprise zone credits under section 5709.65 of the
Revised Code;

(31) The research and development credit under section
5747.331 of the Revised Code;

(32) The credit for rehabilitating a historic building under
section 5747.76 of the Revised Code;

(33) The refundable credit for rehabilitating a historic
building under section 5747.76 of the Revised Code;

(34) The refundable jobs creation credit or job retention
credit under division (A) of section 5747.058 of the Revised Code;

(35) The refundable credit for taxes paid by a qualifying
entity granted under section 5747.059 of the Revised Code;

(36) The refundable credits for taxes paid by a qualifying
pass-through entity granted under division (J) of section 5747.08
of the Revised Code;

(37) The refundable credit for tax withheld under division
(B)(1) of section 5747.062 of the Revised Code;

(38) The refundable credit for tax withheld under section
5747.063 of the Revised Code;

(39) The refundable credit under section 5747.80 of the
Revised Code for losses on loans made to the Ohio venture capital
program under sections 150.01 to 150.10 of the Revised Code;

(40) The refundable motion picture production credit under
section 5747.66 of the Revised Code;

(41) The refundable credit for financial institution taxes
paid by a pass-through entity granted under section 5747.65 of the
Revised Code.

(B) For any credit, except the refundable credits enumerated
in this section and the credit granted under division (I) of
section 5747.08 of the Revised Code, the amount of the credit for
a taxable year shall not exceed the tax due after allowing for any
other credit that precedes it in the order required under this
section. Any excess amount of a particular credit may be carried
forward if authorized under the section creating that credit.
Nothing in this chapter shall be construed to allow a taxpayer to
claim, directly or indirectly, a credit more than once for a
taxable year.

(B) "Consolidated elected taxpayer" means a group of two or
more persons treated as a single taxpayer for purposes of this
chapter as the result of an election made under section 5751.011
of the Revised Code.

(C) "Combined taxpayer" means a group of two or more persons
treated as a single taxpayer for purposes of this chapter under
section 5751.012 of the Revised Code.

(D) "Taxpayer" means any person, or any group of persons in
the case of a consolidated elected taxpayer or combined taxpayer
treated as one taxpayer, required to register or pay tax under
this chapter. "Taxpayer" does not include excluded persons.

(E) "Excluded person" means any of the following:

(1) Any person with not more than one hundred fifty thousand
dollars of taxable gross receipts during the calendar year.
Division (E)(1) of this section does not apply to a person that is
a member of a consolidated elected taxpayer;

(2) A public utility that paid the excise tax imposed by
section 5727.24 or 5727.30 of the Revised Code based on one or
more measurement periods that include the entire tax period under
this chapter, except that a public utility that is a combined
company is a taxpayer with regard to the following gross receipts:

(a) Taxable gross receipts directly attributed to a public
utility activity, but not directly attributed to an activity that
is subject to the excise tax imposed by section 5727.24 or 5727.30
of the Revised Code;

(b) Taxable gross receipts that cannot be directly attributed
to any activity, multiplied by a fraction whose numerator is the
taxable gross receipts described in division (E)(2)(a) of this
section and whose denominator is the total taxable gross receipts
that can be directly attributed to any activity;

(c) Except for any differences resulting from the use of an
accrual basis method of accounting for purposes of determining
gross receipts under this chapter and the use of the cash basis
method of accounting for purposes of determining gross receipts
under section 5727.24 of the Revised Code, the gross receipts
directly attributed to the activity of a natural gas company shall
be determined in a manner consistent with division (D) of section
5727.03 of the Revised Code.

As used in division (E)(2) of this section, "combined
company" and "public utility" have the same meanings as in section
5727.01 of the Revised Code.

(3) A financial institution, as defined in section 5725.015726.01 of the Revised Code, that paid the corporation franchise
tax charged by division (D) ofimposed by section 5733.065726.02
of the Revised Code based on one or more taxable years that
include the entire tax period under this chapter;

(4) A dealer in intangibles, as defined in section 5725.01 of
the Revised Code, that paid the dealer in intangibles tax levied
by division (D) of section 5707.03 of the Revised Code based on
one or more measurement periods that include the entire tax period
under this chapter;

(5) A financial holding company as defined in the "Bank
Holding Company Act," 12 U.S.C. 1841(p);

(6) A bank holding company as defined in the "Bank Holding
Company Act," 12 U.S.C. 1841(a);

(7) A savings and loan holding company as defined in the
"Home Owners Loan Act," 12 U.S.C. 1467a(a)(1)(D) that is engaging
only in activities or investments permissible for a financial
holding company under 12 U.S.C. 1843(k);

(8) A person directly or indirectly owned by one or more
financial institutions, financial holding companies, bank holding
companies, or savings and loan holding companies described in
division (E)(3), (5), (6), or (7) of this section that is engaged
in activities permissible for a financial holding company under 12
U.S.C. 1843(k), except that any such person held pursuant to
merchant banking authority under 12 U.S.C. 1843(k)(4)(H) or 12
U.S.C. 1843(k)(4)(I) is not an excluded person, or a person
directly or indirectly owned by one or more insurance companies
described in division (E)(9) of this section that is authorized to
do the business of insurance in this state.A person directly or
indirectly owned by one or more financial institutions, as defined
in section 5726.01 of the Revised Code, that paid the tax imposed
by section 5726.02 of the Revised Code based on one or more
taxable years that include the entire tax period under this
chapter.

For the purposes of division (E)(8)(4) of this section, a
person owns another person under the following circumstances:

(a) In the case of corporations issuing capital stock, one
corporation owns another corporation if it owns fifty per cent or
more of the other corporation's capital stock with current voting
rights;

(b) In the case of a limited liability company, one person
owns the company if that person's membership interest, as defined
in section 1705.01 of the Revised Code, is fifty per cent or more
of the combined membership interests of all persons owning such
interests in the company;

(c) In the case of a partnership, trust, or other
unincorporated business organization other than a limited
liability company, one person owns the organization if, under the
articles of organization or other instrument governing the affairs
of the organization, that person has a beneficial interest in the
organization's profits, surpluses, losses, or distributions of
fifty per cent or more of the combined beneficial interests of all
persons having such an interest in the organization;

(d) In the case of multiple ownership, the ownership
interests of more than one person may be aggregated to meet the
fifty per cent ownership tests in this division only when each
such owner is described in division (E)(3), (5), (6), or (7) of
this section and is engaged in activities permissible for a
financial holding company under 12 U.S.C. 1843(k) or is a person
directly or indirectly owned by one or more insurance companies
described in division (E)(9) of this section that is authorized to
do the business of insurance in this state.

(9)(5) A domestic insurance company or foreign insurance
company, as defined in section 5725.01 of the Revised Code, that
paid the insurance company premiums tax imposed by section 5725.18
or Chapter 5729. of the Revised Code based on one or more
measurement periods that include the entire tax period under this
chapter;

(10) A person that solely facilitates or services one or more
securitizations or similar transactions for any person described
in division (E)(3), (5), (6), (7), (8), or (9) of this section.
For purposes of this division, "securitization" means transferring
one or more assets to one or more persons and then issuing
securities backed by the right to receive payment from the asset
or assets so transferred.

(11)(6) Except as otherwise provided in this division, a
pre-income tax trust as defined in division (FF)(4) of section
5747.01 of the Revised Code and any pass-through entity of which
such pre-income tax trust owns or controls, directly, indirectly,
or constructively through related interests, more than five per
cent of the ownership or equity interests. If the pre-income tax
trust has made a qualifying pre-income tax trust election under
division (FF)(3) of section 5747.01 of the Revised Code, then the
trust and the pass-through entities of which it owns or controls,
directly, indirectly, or constructively through related interests,
more than five per cent of the ownership or equity interests,
shall not be excluded persons for purposes of the tax imposed
under section 5751.02 of the Revised Code.

(12)(7) Nonprofit organizations or the state and its
agencies, instrumentalities, or political subdivisions.

(F) Except as otherwise provided in divisions (F)(2), (3),
and (4) of this section, "gross receipts" means the total amount
realized by a person, without deduction for the cost of goods sold
or other expenses incurred, that contributes to the production of
gross income of the person, including the fair market value of any
property and any services received, and any debt transferred or
forgiven as consideration.

(1) The following are examples of gross receipts:

(a) Amounts realized from the sale, exchange, or other
disposition of the taxpayer's property to or with another;

(b) Amounts realized from the taxpayer's performance of
services for another;

(c) Amounts realized from another's use or possession of the
taxpayer's property or capital;

(d) Any combination of the foregoing amounts.

(2) "Gross receipts" excludes the following amounts:

(a) Interest income except interest on credit sales;

(b) Dividends and distributions from corporations, and
distributive or proportionate shares of receipts and income from a
pass-through entity as defined under section 5733.04 of the
Revised Code;

(c) Receipts from the sale, exchange, or other disposition of
an asset described in section 1221 or 1231 of the Internal Revenue
Code, without regard to the length of time the person held the
asset. Notwithstanding section 1221 of the Internal Revenue Code,
receipts from hedging transactions also are excluded to the extent
the transactions are entered into primarily to protect a financial
position, such as managing the risk of exposure to (i) foreign
currency fluctuations that affect assets, liabilities, profits,
losses, equity, or investments in foreign operations; (ii)
interest rate fluctuations; or (iii) commodity price fluctuations.
As used in division (F)(2)(c) of this section, "hedging
transaction" has the same meaning as used in section 1221 of the
Internal Revenue Code and also includes transactions accorded
hedge accounting treatment under statement of financial accounting
standards number 133 of the financial accounting standards board.
For the purposes of division (F)(2)(c) of this section, the actual
transfer of title of real or tangible personal property to another
entity is not a hedging transaction.

(d) Proceeds received attributable to the repayment,
maturity, or redemption of the principal of a loan, bond, mutual
fund, certificate of deposit, or marketable instrument;

(e) The principal amount received under a repurchase
agreement or on account of any transaction properly characterized
as a loan to the person;

(f) Contributions received by a trust, plan, or other
arrangement, any of which is described in section 501(a) of the
Internal Revenue Code, or to which Title 26, Subtitle A, Chapter
1, Subchapter (D) of the Internal Revenue Code applies;

(g) Compensation, whether current or deferred, and whether in
cash or in kind, received or to be received by an employee, former
employee, or the employee's legal successor for services rendered
to or for an employer, including reimbursements received by or for
an individual for medical or education expenses, health insurance
premiums, or employee expenses, or on account of a dependent care
spending account, legal services plan, any cafeteria plan
described in section 125 of the Internal Revenue Code, or any
similar employee reimbursement;

(h) Proceeds received from the issuance of the taxpayer's own
stock, options, warrants, puts, or calls, or from the sale of the
taxpayer's treasury stock;

(i) Proceeds received on the account of payments from
insurance policies, except those proceeds received for the loss of
business revenue;

(j) Gifts or charitable contributions received; membership
dues received by trade, professional, homeowners', or condominium
associations; and payments received for educational courses,
meetings, meals, or similar payments to a trade, professional, or
other similar association; and fundraising receipts received by
any person when any excess receipts are donated or used
exclusively for charitable purposes;

(k) Damages received as the result of litigation in excess of
amounts that, if received without litigation, would be gross
receipts;

(l) Property, money, and other amounts received or acquired
by an agent on behalf of another in excess of the agent's
commission, fee, or other remuneration;

(m) Tax refunds, other tax benefit recoveries, and
reimbursements for the tax imposed under this chapter made by
entities that are part of the same combined taxpayer or
consolidated elected taxpayer group, and reimbursements made by
entities that are not members of a combined taxpayer or
consolidated elected taxpayer group that are required to be made
for economic parity among multiple owners of an entity whose tax
obligation under this chapter is required to be reported and paid
entirely by one owner, pursuant to the requirements of sections
5751.011 and 5751.012 of the Revised Code;

(n) Pension reversions;

(o) Contributions to capital;

(p) Sales or use taxes collected as a vendor or an
out-of-state seller on behalf of the taxing jurisdiction from a
consumer or other taxes the taxpayer is required by law to collect
directly from a purchaser and remit to a local, state, or federal
tax authority;

(q) In the case of receipts from the sale of cigarettes or
tobacco products by a wholesale dealer, retail dealer,
distributor, manufacturer, or seller, all as defined in section
5743.01 of the Revised Code, an amount equal to the federal and
state excise taxes paid by any person on or for such cigarettes or
tobacco products under subtitle E of the Internal Revenue Code or
Chapter 5743. of the Revised Code;

(r) In the case of receipts from the sale of motor fuel by a
licensed motor fuel dealer, licensed retail dealer, or licensed
permissive motor fuel dealer, all as defined in section 5735.01 of
the Revised Code, an amount equal to federal and state excise
taxes paid by any person on such motor fuel under section 4081 of
the Internal Revenue Code or Chapter 5735. of the Revised Code;

(s) In the case of receipts from the sale of beer or
intoxicating liquor, as defined in section 4301.01 of the Revised
Code, by a person holding a permit issued under Chapter 4301. or
4303. of the Revised Code, an amount equal to federal and state
excise taxes paid by any person on or for such beer or
intoxicating liquor under subtitle E of the Internal Revenue Code
or Chapter 4301. or 4305. of the Revised Code;

(t) Receipts realized by a new motor vehicle dealer or used
motor vehicle dealer, as defined in section 4517.01 of the Revised
Code, from the sale or other transfer of a motor vehicle, as
defined in that section, to another motor vehicle dealer for the
purpose of resale by the transferee motor vehicle dealer, but only
if the sale or other transfer was based upon the transferee's need
to meet a specific customer's preference for a motor vehicle;

(u) Receipts from a financial institution described in
division (E)(3) of this section for services provided to the
financial institution in connection with the issuance, processing,
servicing, and management of loans or credit accounts, if such
financial institution and the recipient of such receipts have at
least fifty per cent of their ownership interests owned or
controlled, directly or constructively through related interests,
by common owners;

(v) Receipts realized from administering anti-neoplastic
drugs and other cancer chemotherapy, biologicals, therapeutic
agents, and supportive drugs in a physician's office to patients
with cancer;

(w) Funds received or used by a mortgage broker that is not a
dealer in intangibles, other than fees or other consideration,
pursuant to a table-funding mortgage loan or warehouse-lending
mortgage loan. Terms used in division (F)(2)(w) of this section
have the same meanings as in section 1322.01 of the Revised Code,
except "mortgage broker" means a person assisting a buyer in
obtaining a mortgage loan for a fee or other consideration paid by
the buyer or a lender, or a person engaged in table-funding or
warehouse-lending mortgage loans that are first lien mortgage
loans.

(x) Property, money, and other amounts received by a
professional employer organization, as defined in section 4125.01
of the Revised Code, from a client employer, as defined in that
section, in excess of the administrative fee charged by the
professional employer organization to the client employer;

(y) In the case of amounts retained as commissions by a
permit holder under Chapter 3769. of the Revised Code, an amount
equal to the amounts specified under that chapter that must be
paid to or collected by the tax commissioner as a tax and the
amounts specified under that chapter to be used as purse money;

(z) Qualifying distribution center receipts.

(i) For purposes of division (F)(2)(z) of this section:

(I) "Qualifying distribution center receipts" means receipts
of a supplier from qualified property that is delivered to a
qualified distribution center, multiplied by a quantity that
equals one minus the Ohio delivery percentage.

(II) "Qualified property" means tangible personal property
delivered to a qualified distribution center that is shipped to
that qualified distribution center solely for further shipping by
the qualified distribution center to another location in this
state or elsewhere. "Further shipping" includes storing and
repackaging such property into smaller or larger bundles, so long
as such property is not subject to further manufacturing or
processing.

(III) "Qualified distribution center" means a warehouse or
other similar facility in this state that, for the qualifying
year, is operated by a person that is not part of a combined
taxpayer group and that has a qualifying certificate. However, all
warehouses or other similar facilities that are operated by
persons in the same taxpayer group and that are located within one
mile of each other shall be treated as one qualified distribution
center.

(IV) "Qualifying year" means the calendar year to which the
qualifying certificate applies.

(V) "Qualifying period" means the period of the first day of
July of the second year preceding the qualifying year through the
thirtieth day of June of the year preceding the qualifying year.

(VI) "Qualifying certificate" means the certificate issued by
the tax commissioner after the operator of a distribution center
files an annual application with the commissioner. The application
and annual fee shall be filed and paid for each qualified
distribution center on or before the first day of September before
the qualifying year or within forty-five days after the
distribution center opens, whichever is later.

The applicant must substantiate to the commissioner's
satisfaction that, for the qualifying period, all persons
operating the distribution center have more than fifty per cent of
the cost of the qualified property shipped to a location such that
it would be sitused outside this state under the provisions of
division (E) of section 5751.033 of the Revised Code. The
applicant must also substantiate that the distribution center
cumulatively had costs from its suppliers equal to or exceeding
five hundred million dollars during the qualifying period. (For
purposes of division (F)(2)(z)(i)(VI) of this section, "supplier"
excludes any person that is part of the consolidated elected
taxpayer group, if applicable, of the operator of the qualified
distribution center.) The commissioner may require the applicant
to have an independent certified public accountant certify that
the calculation of the minimum thresholds required for a qualified
distribution center by the operator of a distribution center has
been made in accordance with generally accepted accounting
principles. The commissioner shall issue or deny the issuance of a
certificate within sixty days after the receipt of the
application. A denial is subject to appeal under section 5717.02
of the Revised Code. If the operator files a timely appeal under
section 5717.02 of the Revised Code, the operator shall be granted
a qualifying certificate, provided that the operator is liable for
any tax, interest, or penalty upon amounts claimed as qualifying
distribution center receipts, other than those receipts exempt
under division (C)(1) of section 5751.011 of the Revised Code,
that would have otherwise not been owed by its suppliers if the
qualifying certificate was valid.

(VII) "Ohio delivery percentage" means the proportion of the
total property delivered to a destination inside Ohio from the
qualified distribution center during the qualifying period
compared with total deliveries from such distribution center
everywhere during the qualifying period.

(ii) If the distribution center is new and was not open for
the entire qualifying period, the operator of the distribution
center may request that the commissioner grant a qualifying
certificate. If the certificate is granted and it is later
determined that more than fifty per cent of the qualified property
during that year was not shipped to a location such that it would
be sitused outside of this state under the provisions of division
(E) of section 5751.033 of the Revised Code or if it is later
determined that the person that operates the distribution center
had average monthly costs from its suppliers of less than forty
million dollars during that year, then the operator of the
distribution center shall be liable for any tax, interest, or
penalty upon amounts claimed as qualifying distribution center
receipts, other than those receipts exempt under division (C)(1)
of section 5751.011 of the Revised Code, that would have not
otherwise been owed by its suppliers during the qualifying year if
the qualifying certificate was valid. (For purposes of division
(F)(2)(z)(ii) of this section, "supplier" excludes any person that
is part of the consolidated elected taxpayer group, if applicable,
of the operator of the qualified distribution center.)

(iii) When filing an application for a qualifying certificate
under division (F)(2)(z)(i)(VI) of this section, the operator of a
qualified distribution center also shall provide documentation, as
the commissioner requires, for the commissioner to ascertain the
Ohio delivery percentage. The commissioner, upon issuing the
qualifying certificate, also shall certify the Ohio delivery
percentage. The operator of the qualified distribution center may
appeal the commissioner's certification of the Ohio delivery
percentage in the same manner as an appeal is taken from the
denial of a qualifying certificate under division (F)(2)(z)(i)(VI)
of this section.

Within thirty days after all appeals have been exhausted, the
operator of the qualified distribution center shall notify the
affected suppliers of qualified property that such suppliers are
required to file, within sixty days after receiving notice from
the operator of the qualified distribution center, amended reports
for the impacted calendar quarter or quarters or calendar year,
whichever the case may be. Any additional tax liability or tax
overpayment shall be subject to interest but shall not be subject
to the imposition of any penalty so long as the amended returns
are timely filed. The supplier of tangible personal property
delivered to the qualified distribution center shall include in
its report of taxable gross receipts the receipts from the total
sales of property delivered to the qualified distribution center
for the calendar quarter or calendar year, whichever the case may
be, multiplied by the Ohio delivery percentage for the qualifying
year. Nothing in division (F)(2)(z)(iii) of this section shall be
construed as imposing liability on the operator of a qualified
distribution center for the tax imposed by this chapter arising
from any change to the Ohio delivery percentage.

(iv) In the case where the distribution center is new and not
open for the entire qualifying period, the operator shall make a
good faith estimate of an Ohio delivery percentage for use by
suppliers in their reports of taxable gross receipts for the
remainder of the qualifying period. The operator of the facility
shall disclose to the suppliers that such Ohio delivery percentage
is an estimate and is subject to recalculation. By the due date of
the next application for a qualifying certificate, the operator
shall determine the actual Ohio delivery percentage for the
estimated qualifying period and proceed as provided in division
(F)(2)(z)(iii) of this section with respect to the calculation and
recalculation of the Ohio delivery percentage. The supplier is
required to file, within sixty days after receiving notice from
the operator of the qualified distribution center, amended reports
for the impacted calendar quarter or quarters or calendar year,
whichever the case may be. Any additional tax liability or tax
overpayment shall be subject to interest but shall not be subject
to the imposition of any penalty so long as the amended returns
are timely filed.

(v) Qualifying certificates and Ohio delivery percentages
issued by the commissioner shall be open to public inspection and
shall be timely published by the commissioner. A supplier relying
in good faith on a certificate issued under this division shall
not be subject to tax on the qualifying distribution center
receipts under division (F)(2)(z) of this section. A person
receiving a qualifying certificate is responsible for paying the
tax, interest, and penalty upon amounts claimed as qualifying
distribution center receipts that would not otherwise have been
owed by the supplier if the qualifying certificate were available
when it is later determined that the qualifying certificate should
not have been issued because the statutory requirements were in
fact not met.

(vi) The annual fee for a qualifying certificate shall be one
hundred thousand dollars for each qualified distribution center.
If a qualifying certificate is not issued, the annual fee is
subject to refund after the exhaustion of all appeals provided for
in division (F)(2)(z)(i)(VI) of this section. The fee imposed
under this division may be assessed in the same manner as the tax
imposed under this chapter. The first one hundred thousand dollars
of the annual application fees collected each calendar year shall
be credited to the commercial activity tax administrative fund.
The remainder of the annual application fees collected shall be
distributed in the same manner required under section 5751.20 of
the Revised Code.

(vii) The tax commissioner may require that adequate security
be posted by the operator of the distribution center on appeal
when the commissioner disagrees that the applicant has met the
minimum thresholds for a qualified distribution center as set
forth in divisions (F)(2)(z)(i)(VI) and (F)(2)(z)(ii) of this
section.

(aa) Receipts of an employer from payroll deductions relating
to the reimbursement of the employer for advancing moneys to an
unrelated third party on an employee's behalf;

(bb) Cash discounts allowed and taken;

(cc) Returns and allowances;

(dd) Bad debts from receipts on the basis of which the tax
imposed by this chapter was paid in a prior quarterly tax payment
period. For the purpose of this division, "bad debts" means any
debts that have become worthless or uncollectible between the
preceding and current quarterly tax payment periods, have been
uncollected for at least six months, and that may be claimed as a
deduction under section 166 of the Internal Revenue Code and the
regulations adopted under that section, or that could be claimed
as such if the taxpayer kept its accounts on the accrual basis.
"Bad debts" does not include repossessed property, uncollectible
amounts on property that remains in the possession of the taxpayer
until the full purchase price is paid, or expenses in attempting
to collect any account receivable or for any portion of the debt
recovered;

(ee) Any amount realized from the sale of an account
receivable to the extent the receipts from the underlying
transaction giving rise to the account receivable were included in
the gross receipts of the taxpayer;

(ff) Any receipts directly attributed to providing public
services pursuant to sections 126.60 to 126.605 of the Revised
Code, or any receipts directly attributed to a transfer agreement
or to the enterprise transferred under that agreement under
section 4313.02 of the Revised Code.

(gg) Any receipts for which the tax imposed by this chapter
is prohibited by the Constitution or laws of the United States or
the Constitution of Ohio.

(hh)(i) As used in this division:

(I) "Qualified uranium receipts" means receipts from the
sale, exchange, lease, loan, production, processing, or other
disposition of uranium within a uranium enrichment zone certified
by the tax commissioner under division (F)(2)(hh)(ii) of this
section. "Qualified uranium receipts" does not include any
receipts with a situs in this state outside a uranium enrichment
zone certified by the tax commissioner under division
(F)(2)(hh)(ii) of this section.

(II) "Uranium enrichment zone" means all real property that
is part of a uranium enrichment facility licensed by the United
States nuclear regulatory commission and that was or is owned or
controlled by the United States department of energy or its
successor.

(ii) Any person that owns, leases, or operates real or
tangible personal property constituting or located within a
uranium enrichment zone may apply to the tax commissioner to have
the uranium enrichment zone certified for the purpose of excluding
qualified uranium receipts under division (F)(2)(hh) of this
section. The application shall include such information that the
tax commissioner prescribes. Within sixty days after receiving the
application, the tax commissioner shall certify the zone for that
purpose if the commissioner determines that the property qualifies
as a uranium enrichment zone as defined in division (F)(2)(hh) of
this section, or, if the tax commissioner determines that the
property does not qualify, the commissioner shall deny the
application or request additional information from the applicant.
If the tax commissioner denies an application, the commissioner
shall state the reasons for the denial. The applicant may appeal
the denial of an application to the board of tax appeals pursuant
to section 5717.02 of the Revised Code. If the applicant files a
timely appeal, the tax commissioner shall conditionally certify
the applicant's property. The conditional certification shall
expire when all of the applicant's appeals are exhausted. Until
final resolution of the appeal, the applicant shall retain the
applicant's records in accordance with section 5751.12 of the
Revised Code, notwithstanding any time limit on the preservation
of records under that section.

(ii) Amounts realized by licensed motor fuel dealers or
licensed permissive motor fuel dealers from the exchange of
petroleum products, including motor fuel, between such dealers,
provided that delivery of the petroleum products occurs at a
refinery, terminal, pipeline, or marine vessel and that the
exchanging dealers agree neither dealer shall require monetary
compensation from the other for the value of the exchanged
petroleum products other than such compensation for differences in
product location or grade. Division (F)(2)(ii) of this section
does not apply to amounts realized as a result of differences in
location or grade of exchanged petroleum products or from
handling, lubricity, dye, or other additive injections fees,
pipeline security fees, or similar fees. As used in this division,
"motor fuel," "licensed motor fuel dealer," "licensed permissive
motor fuel dealer," and "terminal" have the same meanings as in
section 5735.01 of the Revised Code.

(hh)(jj) In the case of amounts collected by a licensed
casino operator from casino gaming, amounts in excess of the
casino operator's gross casino revenue. In this division, "casino
operator" and "casino gaming" have the meanings defined in section
3772.01 of the Revised Code, and "gross casino revenue" has the
meaning defined in section 5753.01 of the Revised Code.

(3) In the case of a taxpayer when acting as a real estate
broker, "gross receipts" includes only the portion of any fee for
the service of a real estate broker, or service of a real estate
salesperson associated with that broker, that is retained by the
broker and not paid to an associated real estate salesperson or
another real estate broker. For the purposes of this division,
"real estate broker" and "real estate salesperson" have the same
meanings as in section 4735.01 of the Revised Code.

(4) A taxpayer's method of accounting for gross receipts for
a tax period shall be the same as the taxpayer's method of
accounting for federal income tax purposes for the taxpayer's
federal taxable year that includes the tax period. If a taxpayer's
method of accounting for federal income tax purposes changes, its
method of accounting for gross receipts under this chapter shall
be changed accordingly.

(G) "Taxable gross receipts" means gross receipts sitused to
this state under section 5751.033 of the Revised Code.

(H) A person has "substantial nexus with this state" if any
of the following applies. The person:

(1) Owns or uses a part or all of its capital in this state;

(2) Holds a certificate of compliance with the laws of this
state authorizing the person to do business in this state;

(3) Has bright-line presence in this state;

(4) Otherwise has nexus with this state to an extent that the
person can be required to remit the tax imposed under this chapter
under the Constitution of the United States.

(I) A person has "bright-line presence" in this state for a
reporting period and for the remaining portion of the calendar
year if any of the following applies. The person:

(1) Has at any time during the calendar year property in this
state with an aggregate value of at least fifty thousand dollars.
For the purpose of division (I)(1) of this section, owned property
is valued at original cost and rented property is valued at eight
times the net annual rental charge.

(2) Has during the calendar year payroll in this state of at
least fifty thousand dollars. Payroll in this state includes all
of the following:

(a) Any amount subject to withholding by the person under
section 5747.06 of the Revised Code;

(b) Any other amount the person pays as compensation to an
individual under the supervision or control of the person for work
done in this state; and

(c) Any amount the person pays for services performed in this
state on its behalf by another.

(3) Has during the calendar year taxable gross receipts of at
least five hundred thousand dollars.

(4) Has at any time during the calendar year within this
state at least twenty-five per cent of the person's total
property, total payroll, or total gross receipts.

(5) Is domiciled in this state as an individual or for
corporate, commercial, or other business purposes.

(J) "Tangible personal property" has the same meaning as in
section 5739.01 of the Revised Code.

(K) "Internal Revenue Code" means the Internal Revenue Code
of 1986, 100 Stat. 2085, 26 U.S.C. 1, as amended. Any term used in
this chapter that is not otherwise defined has the same meaning as
when used in a comparable context in the laws of the United States
relating to federal income taxes unless a different meaning is
clearly required. Any reference in this chapter to the Internal
Revenue Code includes other laws of the United States relating to
federal income taxes.

(L) "Calendar quarter" means a three-month period ending on
the thirty-first day of March, the thirtieth day of June, the
thirtieth day of September, or the thirty-first day of December.

(M) "Tax period" means the calendar quarter or calendar year
on the basis of which a taxpayer is required to pay the tax
imposed under this chapter.

(N) "Calendar year taxpayer" means a taxpayer for which the
tax period is a calendar year.

(O) "Calendar quarter taxpayer" means a taxpayer for which
the tax period is a calendar quarter.

(P) "Agent" means a person authorized by another person to
act on its behalf to undertake a transaction for the other,
including any of the following:

(1) A person receiving a fee to sell financial instruments;

(2) A person retaining only a commission from a transaction
with the other proceeds from the transaction being remitted to
another person;

(3) A person issuing licenses and permits under section
1533.13 of the Revised Code;

(5) A person acting as an agent of the division of liquor
control under section 4301.17 of the Revised Code.

(Q) "Received" includes amounts accrued under the accrual
method of accounting.

(R) "Reporting person" means a person in a consolidated
elected taxpayer or combined taxpayer group that is designated by
that group to legally bind the group for all filings and tax
liabilities and to receive all legal notices with respect to
matters under this chapter, or, for the purposes of section
5751.04 of the Revised Code, a separate taxpayer that is not a
member of such a group.

Sec. 5751.011. (A) A group of two or more persons may elect
to be a consolidated elected taxpayer for the purposes of this
chapter if the group satisfies all of the following requirements:

(1) The group elects to include all persons, including
persons enumerated in divisions (E)(2) to (10)(5) of section
5751.01 of the Revised Code, having at least eighty per cent, or
having at least fifty per cent, of the value of their ownership
interests owned or controlled, directly or constructively through
related interests, by common owners during all or any portion of
the tax period, together with the common owners.

A group making its initial election on the basis of the
eighty per cent ownership test may change its election so that its
consolidated elected taxpayer group is formed on the basis of the
fifty per cent ownership test if all of the following are
satisfied:

(a) When the initial election was made, the group did not
have any persons satisfying the fifty per cent ownership test;

(b) One or more of the persons in the initial group
subsequently acquires ownership interests in a person such that
the fifty per cent ownership test is satisfied, the eighty per
cent ownership test is not satisfied, and the acquired person
would be required to be included in a combined taxpayer group
under section 5751.012 of the Revised Code;

(c) The group requests the change in a written request to the
tax commissioner on or before the due date for filing the first
return due under section 5751.051 of the Revised Code after the
date of the acquisition;

(d) The group has not previously changed its election.

At the election of the group, all entities that are not
incorporated or formed under the laws of a state or of the United
States and that meet the consolidated elected ownership test shall
either be included in the group or all shall be excluded from the
group. If, at the time of registration, the group does not include
any such entities that meet the consolidated elected ownership
test, the group shall elect to either include or exclude the newly
acquired entities before the due date of the first return due
after the date of the acquisition.

Each group shall notify the tax commissioner of the foregoing
elections before the due date of the return for the period in
which the election becomes binding. If fifty per cent of the value
of a person's ownership interests is owned or controlled by each
of two consolidated elected taxpayer groups formed under the fifty
per cent ownership or control test, that person is a member of
each group for the purposes of this section, and each group shall
include in the group's taxable gross receipts fifty per cent of
that person's taxable gross receipts. Otherwise, all of that
person's taxable gross receipts shall be included in the taxable
gross receipts of the consolidated elected taxpayer group of which
the person is a member. In no event shall the ownership or control
of fifty per cent of the value of a person's ownership interests
by two otherwise unrelated groups form the basis for consolidating
the groups into a single consolidated elected taxpayer group or
permit any exclusion under division (C) of this section of taxable
gross receipts between members of the two groups. Division (A)(3)
of this section applies with respect to the elections described in
this division.

(2) The group makes the election to be treated as a
consolidated elected taxpayer in the manner prescribed under
division (D) of this section.

(3) Subject to review and audit by the tax commissioner, the
group agrees that all of the following apply:

(a) The group shall file reports as a single taxpayer for at
least the next eight calendar quarters following the election so
long as at least two or more of the members of the group meet the
requirements of division (A)(1) of this section.

(b) Before the expiration of the eighth such calendar
quarter, the group shall notify the commissioner if it elects to
cancel its designation as a consolidated elected taxpayer. If the
group does not so notify the tax commissioner, the election
remains in effect for another eight calendar quarters.

(c) If, at any time during any of those eight calendar
quarters following the election, a former member of the group no
longer meets the requirements under division (A)(1) of this
section, that member shall report and pay the tax imposed under
this chapter separately, as a member of a combined taxpayer, or,
if the former member satisfies such requirements with respect to
another consolidated elected group, as a member of that
consolidated elected group.

(d) The group agrees to the application of division (B) of
this section.

(B) A group of persons making the election under this section
shall report and pay tax on all of the group's taxable gross
receipts even if substantial nexus with this state does not exist
for one or more persons in the group.

(C)(1)(a) Members of a consolidated elected taxpayer group
shall exclude gross receipts among persons included in the
consolidated elected taxpayer group.

(b) Subject to divisions (C)(1)(c) and (C)(2) of this
section, nothing in this section shall have the effect of
requiring a consolidated elected taxpayer group to include gross
receipts received by a person enumerated in divisions (E)(2) to
(10)(5) of section 5751.01 of the Revised Code if that person is a
member of the group pursuant to the elections made by the group
under division (A)(1) of this section.

(c)(i) As used in division (C)(1)(c) of this section, "dealer
transfer" means a transfer of property that satisfies both of the
following: (I) the property is directly transferred by any means
from one member of the group to another member of the group that
is a dealer in intangibles but is not a qualifying dealer as
defined in section 5707.031 of the Revised Code; and (II) the
property is subsequently delivered by the dealer in intangibles to
a person that is not a member of the group.

(ii) In the event of a dealer transfer, a consolidated
elected taxpayer group shall not exclude, under division (C) of
this section, gross receipts from the transfer described in
division (C)(1)(c)(i)(I) of this section.

(2) Gross receipts related to the sale or transmission of
electricity through the use of an intermediary regional
transmission organization approved by the federal energy
regulatory commission shall be excluded from taxable gross
receipts under division (C)(1) of this section if all other
requirements of that division are met, even if the receipts are
from and to the same member of the group.

(D) To make the election to be a consolidated elected
taxpayer, a group of persons shall notify the tax commissioner of
the election in the manner prescribed by the commissioner and pay
the commissioner a registration fee equal to the lesser of two
hundred dollars or twenty dollars for each person in the group. No
additional fee shall be imposed for the addition of new members to
the group once the group has remitted a fee in the amount of two
hundred dollars. The election shall be made and the fee paid
before the beginning of the first calendar quarter to which the
election applies. The fee shall be collected and used in the same
manner as provided in section 5751.04 of the Revised Code.

The election shall be made on a form prescribed by the tax
commissioner for that purpose and shall be signed by one or more
individuals with authority, separately or together, to make a
binding election on behalf of all persons in the group.

Any person acquired or formed after the filing of the
registration shall be included in the group if the person meets
the requirements of division (A)(1) of this section, and the group
shall notify the tax commissioner of any additions to the group
with the next tax return it files with the commissioner.

Sec. 5751.012. (A) All persons, other than persons
enumerated in divisions (E)(2) to (10)(5) of section 5751.01 of
the Revised Code, having more than fifty per cent of the value of
their ownership interest owned or controlled, directly or
constructively through related interests, by common owners during
all or any portion of the tax period, together with the common
owners, shall be members of a combined taxpayer if those persons
are not members of a consolidated elected taxpayer pursuant to an
election under section 5751.011 of the Revised Code.

(B) A combined taxpayer shall register, file returns, and pay
taxes under this chapter as a single taxpayer.

(C) A combined taxpayer shall neither exclude taxable gross
receipts between its members nor from others that are not members.

(D) A combined taxpayer shall pay to the tax commissioner a
registration fee equal to the lesser of two hundred dollars or
twenty dollars for each person in the group. No additional fee
shall be imposed for the addition of new members to the group once
the group has remitted a fee in the amount of two hundred dollars.
The fee shall be timely paid before the later of the beginning of
the first calendar quarter or November 15, 2005. The fee shall be
collected and used in the same manner as provided in section
5751.04 of the Revised Code.

Any person acquired or formed after the filing of the
registration shall be included in the group if the person meets
the requirements of division (A) of this section, and the group
must notify the tax commissioner of any additions with the next
quarterly tax return it files with the commissioner.

Sec. 5751.54. (A) Any term used in this section has the same
meaning as in section 122.85 of the Revised Code.

(B) There is allowed a refundable credit against the tax
imposed by section 5751.02 of the Revised Code for any person that
is the certificate owner of a tax credit certificate issued under
section 122.85 of the Revised Code. The credit shall be claimed
for the tax period in which the certificate is issued by the
director of development services. The credit amount equals the
amount stated in the certificate. The credit shall be claimed in
the order required under section 5751.98 of the Revised Code. If
the credit amount exceeds the tax otherwise due under section
5751.02 of the Revised Code after deducting all other credits in
that order, the excess shall be refunded.

(C) Nothing in this section allows a person to claim more
than one credit per tax credit-eligible production.

Sec. 5751.98. (A) To provide a uniform procedure for
calculating the amount of tax due under this chapter, a taxpayer
shall claim any credits to which it is entitled in the following
order:

(1) The nonrefundable jobs retention credit under division
(B) of section 5751.50 of the Revised Code;

(2) The nonrefundable credit for qualified research expenses
under division (B) of section 5751.51 of the Revised Code;

(3) The nonrefundable credit for a borrower's qualified
research and development loan payments under division (B) of
section 5751.52 of the Revised Code;

(4) The nonrefundable credit for calendar years 2010 to 2029
for unused net operating losses under division (B) of section
5751.53 of the Revised Code;

(5) The refundable motion picture production credit for
calendar year 2030 for unused net operating losses under division
(C) of section 5751.535751.54 of the Revised Code;

(6) The refundable jobs creation credit or job retention
credit under division (A) of section 5751.50 of the Revised Code;

(7) The refundable credit for calendar year 2030 for unused
net operating losses under division (C) of section 5751.53 of the
Revised Code.

(B) For any credit except the refundable credits enumerated
in this section, the amount of the credit for a tax period shall
not exceed the tax due after allowing for any other credit that
precedes it in the order required under this section. Any excess
amount of a particular credit may be carried forward if authorized
under the section creating the credit.

Section 3. The amendment by this act of division (E) of
section 5751.01 and sections 5751.011 and 5751.012 of the Revised
Code applies to tax periods beginning on or after January 1, 2014.

Section 4. The General Assembly, applying the principle
stated in division (B) of section 1.52 of the Revised Code that
amendments are to be harmonized if reasonably capable of
simultaneous operation, finds that the following sections,
presented in this act as composites of the sections as amended by
the acts indicated, are the resulting versions of the sections in
effect prior to the effective date of the sections as presented in
this act:

Section 5747.01 of the Revised Code as amended by both Am.
Sub. H.B. 153 and Am. H.B. 167 of the 129th General Assembly.

Section 5751.01 of the Revised Code as amended by both Am.
Sub. H.B. 153 and Sub. H.B. 277 of the 129th General Assembly.